Resale Certificates for Garage Makers: Buying Materials Without Paying Sales Tax Twice

If you make things to sell, sales tax probably hits you twice. You pay it when you buy wood, fabric, resin or blank mugs, and then you collect it again when you sell the finished product. A resale certificate (sometimes called a resale exemption certificate) is how many states let a registered seller avoid paying tax on materials that become part of a product they sell. Used correctly, it lowers your material costs. Used carelessly, it can lead to back taxes, penalties and, in serious cases, criminal charges.

This guide explains how resale certificates generally work, what qualifies and what doesn’t, the multistate forms, and how to use a certificate with big suppliers. It’s general information as of October 2026. Sales tax is set state by state, so always check with your state’s revenue agency.

The basic idea

Sales tax is meant to be paid once, by the final customer. When a business buys something it will resell, the state lets it skip the tax at purchase as long as it collects tax on the final sale. For makers, this usually covers two kinds of purchases:

Finished goods you resell as-is, such as blank tumblers you sell unchanged as part of a gift set.
Materials that become part of the product, such as the lumber in a table, the fabric in a dog bed or the vinyl on a decal.

You give the supplier a completed certificate, and the supplier keeps it on file to explain why it didn’t charge you tax. California’s CDTFA explains that a seller who accepts a valid certificate in good faith isn’t liable for the tax on that sale. That’s why suppliers ask for one.

Get a sales tax permit first

In most states you can’t issue a resale certificate unless you’re registered to collect sales tax. Florida’s Department of Revenue, for example, issues its Annual Resale Certificate only to registered dealers, and it expires every December 31. Texas has its own resale certificate, Form 01-339, and notes that a permit number on its own isn’t a substitute for a completed certificate.

Registration is often free. The Texas Comptroller says there’s no fee to apply for a sales and use tax permit. If you haven’t registered yet, start there. Our sales tax basics article covers permits, marketplaces and craft fairs in more detail.

What qualifies, and what doesn’t

This is where honest makers get tripped up. The test is whether the item is resold or becomes part of what you sell, not whether you use it for your business.

Usually qualifies

Raw materials that end up in the finished product: wood, fabric, thread, resin, metal and blanks.
Components such as hardware, hinges, zippers and magnets that are part of the item.

Usually doesn’t qualify

Tools and equipment: saws, sewing machines, heat presses and laser engravers. You use them; you don’t resell them.
Supplies used up in production: sandpaper, saw blades and cleaning supplies.
Office items: computers, furniture and printer paper.
Personal items and anything bought “just in case.”

Florida says its certificate doesn’t cover items you use, items used before resale, or business and personal items such as furniture, computers and supplies. California’s guidance says a resale certificate shouldn’t be used for property you’ll use yourself or hold as an investment.

Mixed orders and changed plans

Shop orders often mix materials and supplies. Texas advises buyers to tell the seller which items are for resale. If you aren’t sure you’ll resell something, don’t use the certificate for it.

If you buy materials tax-free and later use them yourself, for example by building a bookshelf for your own house, you generally owe use tax on them. Florida and Texas both say this, and you’ll usually report it on your sales tax return.

Penalties for misuse

States take this seriously:

Texas: misusing a resale certificate is a crime. Penalties range from a Class C misdemeanor for small amounts up to a felony when the tax evaded is $20,000 or more.
California: buyers who misuse certificates owe the tax plus penalties and interest, and intentional misuse can be prosecuted.
Florida: its page warns of criminal and civil penalties for fraudulent use.

If you keep material and supply purchases separate from the start, you’ll avoid most of the risk.

Buying from out-of-state suppliers

Many makers buy online from suppliers in other states. Two multistate forms help:

Streamlined Sales Tax Certificate of Exemption

The Streamlined Sales Tax Governing Board publishes a single exemption certificate (form F0003). All 24 member states accept it: Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming as full members, plus Tennessee as an associate member. Not every exemption applies in every state, and the governing board points buyers to each state’s taxability details. You give the form to the supplier. You don’t send it to the states.

MTC Uniform Sales and Use Tax Certificate

The Multistate Tax Commission publishes a uniform certificate that lists participating states and their conditions. Its FAQ notes that some states require you to be registered there, while others accept your home-state registration. States can change their policies, so check the current notes on the form.

States without a sales tax

Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax, though Alaska has local sales taxes in many places. Oregon’s Department of Revenue notes that Oregon businesses can offer an Oregon resale certificate to out-of-state sellers, but sellers don’t have to accept it, and some states want their own form.

Using a certificate with big suppliers

Large retailers have their own tax-exempt programs:

The Home Depot: businesses apply online for a tax-exempt ID by submitting their tax information and documents. Home Depot says approval usually takes a few business days, and the ID then works in stores and online.
Amazon Business: through its Tax Exemption Program you upload a signed exemption certificate or enter the details. Amazon says a sales tax permit alone isn’t accepted; it wants the certificate.
Specialty suppliers (lumber yards, fabric wholesalers and blank suppliers) usually have a form or upload page for certificates. Ask before your first order.

These programs only stop the tax at checkout. Whether a particular purchase qualifies is still your responsibility under your state’s rules.

What about Etsy and other marketplaces?

Marketplace facilitator laws change how you collect tax on sales, not on purchases. Etsy says it calculates, collects and remits sales tax on qualifying orders to 46 listed states plus DC and Puerto Rico. Sellers can’t opt out. That doesn’t affect whether you can buy materials tax-free, which depends on your state’s rules for resale certificates. If you also sell at craft fairs, through your own website or wholesale to shops, you may still be responsible for collecting tax yourself. Check with your state.

Simple habits that keep you safe

Keep material and supply orders separate where you can, or ask suppliers to split the invoice.
Keep copies of every certificate you’ve issued and every supplier approval. Texas notes that sellers must keep certificates for four years, and buyers should keep good records too.
Track materials you end up using yourself and report use tax on them.
Review your process once a year, especially if you start selling in new ways.
Ask a professional if you aren’t sure whether something qualifies. A tax preparer or your state’s taxpayer help line can answer specific questions.

Taken together, a resale certificate helps you avoid paying tax twice on your materials, but only if you use it for materials that end up in what you sell.

This article is general information, not tax or legal advice. Rules differ by state and change over time, so confirm with your state revenue agency or a tax professional.

Resale Certificates for Garage Makers: Buying Materials Without Paying Sales Tax Twice

The basic idea

Get a sales tax permit first