Exemptions

 

For information on a specific state's exemptions or exempt entities, please contact that state

 

Exemption Certificates

Do not send exemption certificates to the Streamlined Sales Tax Governing Board or to the states. Purchasers should provide the completed exemption certificate to their supplier and keep a copy for their records.

 

Do I use my SSTID or state issued registration/license number when purchasing items for resale?

Each state determines if you can use your SSTID or its state issued ID number on your exemption certificate when claiming a purchase for resale.  Contact the state or download and review the Exemption Certificate – Streamlined Member State Survey Results to determine if you should use your SSTID or the state issued ID number.

 

Streamlined Exemption Certificate Form

Streamlined Exemption Certificate Instructions

Exemption Certificate Administration Training PowerPoint

 

Exempt Entities

If you are seeking an exemption from sales or use tax on your purchases, contact the state in which you are seeking the exemption.

 

Drop Shipments

A “Drop ship” occurs when a seller sells a product, then purchases the item from a third party and has the third party ship the product directly to the seller's customer.   The third-party supplier is referred to as a drop shipper.

This explains how Streamlined Full Member States tax drop shipments of tangible personal property that is sourced to a Streamlined Full Member State.  Seller’s that have products drop shipped into other states should check with those states to determine their tax liability.

This does not address drop shipments of services and digital products. State laws determine whether a seller may provide a supplier or another seller with a resale exemption certificate on the sale of services or digital products.

 

Drop Shipper’s (Third-Party Supplier) Tax Liability

A Drop Shipper is required to collect and remit sales tax unless an exemption applies. 

A seller may issue the Drop Shipper an exemption certificate claiming resale when the Drop Shipper delivers products the seller sold to the seller’s customer. 

When a Drop Shipper delivers a product to the seller's customer in a Streamlined Full Member State, the seller may use the seller’s sales tax registration number from the seller’s state on the exemption certificate provided to the Drop Shipper.  The seller is not required to provide a sales tax registration number from the state to which the sale is sourced when purchasing products for resale. 

Exception: Tennessee requires the seller provide a Tennessee resale number to the Drop Shipper when the sale is sourced to Tennessee.

If the Drop Shipper receives a fully completed exemption certificate from the seller, the Drop Shipper is not liable for the sales tax on products the Drop shipper delivered to the seller's customer in a Streamlined Member state.   

 

Seller's Tax Liability

Sellers registered through the Streamlined Sales Tax Registration System (SSTRS) are required to collect sales tax in all Streamlined Full Member States.  The seller must collect and remit sales tax for the state in which the product they sold is sourced.  If the seller’s customer provides an exemption certificate to the seller, the seller should not collect sales or use tax on that transaction. 

Sellers and suppliers not registered through the SSTRS should check with all states in which they have sales to determine if they are required to register and to collect and remit sales tax.

 

Customer's Tax Liability

When the seller does not collect and remit the applicable sales tax due, the seller’s customer must remit use tax directly to the state unless the customer can claim a valid exemption.

 

Supporting Documentation

Additional documentation indicating the state’s acceptance of the use of your exemption or resale number is available on the State's Certificate of Compliance.   To view the drop shipment criteria, click on the state in question to open its certificate.  Then scroll to section #317080