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Illinois Resale Certificates 101

February 10, 2017 | Sales Tax

By Suzanne Kearns

If you do business in Illinois, chances are you will either need to use or accept a resale certificate at some point. Luckily, the state doesn’t make using these essential documents difficult. Here’s what you need to know about using a resale certificate in Illinois.

When sellers purchase products to resell, the state doesn’t require them to pay sales tax on the purchase. This is because the seller will collect the tax down the line when they sell the product to the end user. But in order to prove that they intend to resell the product, they must provide a valid resale certificate.

How to Use an Illinois Resale Certificate

If you want to purchase products to resell, you’ll need to go to the Illinois website and download a copy of the official Certificate of Resale, or create your own. If you create your own by using a template or one of the standard forms sold at office supply stores, you should include the following information on it to ensure it’s valid. (The state even allows purchase orders to be used as the certificate as long as the same information appears on it.)

  • The seller’s name and address
  • The buyer’s name and address
  • A description of the product being sold
  • A statement from the buyer saying that the product is being purchased for resale
  • The buyer’s signature
  • Either your Illinois account ID number, an Illinois resale number, or–if you’re buying from an out-of-state seller–a certification of resale.

If you frequently make tax-free purchases from the same seller, you can give them a blanket certificate in order to avoid having to present one at every transaction. The state of Illinois says you can either issue a blanket resale certificate stating that all purchases made from the seller are for the purposes of resale, or you can issue a certificate that states a certain percentage of your purchases are for resale. If anything changes, you should issue a new certificate with the updated information, or renew it every three years, whichever comes first.

How to Accept an Illinois Resale Certificate

If you’re presented a resale certificate, you have certain obligations to the state when accepting it. Here is the three-step process for accepting an Illinois resale certificate.

  • Check the information. You should refer to the above list and make sure the certificate contains all of the required information. If it doesn’t, ask the buyer to provide it before you accept the certificate.
  • Use the Illinois online service to verify that the resale certificate number is valid.
  • Keep a copy. It’s the seller’s responsibility to keep a copy of the resale certificate in case the Illinois DOR requires it in the future. While the DOR doesn’t provide a specific amount of time that you have to hang onto it, it does require that the certificates be updated every three years.

Illinois makes it easy for buyers and sellers to use resale certificates. Simply follow the above rules and you’ll stay in compliance with the DOR.

What are your thoughts on this topic? Share with us in the comments below.


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