A resale certificate is a document that allows a business to purchase goods and services tax-free from suppliers for the purpose of reselling them to customers. It is a special permit issued by the states Department of Revenue that allows businesses to avoid paying sales tax on any goods or items they intend to resell to their customers. The certificate is usually provided in a "blanket" form, meaning that it applies to all items purchased from the vendor.

To use a resale certificate, a business must provide it to the retailer where they are making the purchase. The certificate is not valid unless it is completed accurately and completely.pdf). The certificate is kept on file by the seller and is not filed with the state.

It is important to note that a resale certificate can only be used to purchase items that the business intends to resell or use as a component part of an item for resale or incorporated into a service that will be taxed when it is sold. A business cannot use a resale certificate to purchase merchandise that they will use and consume in the conduct of business. If a business makes improper use of the certificate, they are subject to penalties as provided by law, including criminal provisions.pdf).

In Kentucky, a business that is registered for sales and use tax can use a resale certificate only when the merchandise being purchased is to be resold by the business. A business needs a resale certificate regardless of its structure, such as sole proprietorship, partnership, LLC, or corporation, if it purchases goods and items and resells them to their customers.

To obtain a resale certificate in Kentucky, a business needs to obtain a blank resale certificate from the Kentucky Department of Revenue. The certificate does not need to be filed with the state, but it needs to be provided to the vendor.