If you operate a business in Washington State, and usually make purchases with resale certificates, you may need to apply for a reseller permit immediately.Beginning Jan, 1, 2010, taxpayers who do not provide a copy of a reseller permit or other acceptable exemption certificate to wholesalers must pay retail sales tax when buying goods and services for resale.

According to a NEWS RELEASE by the Washington Department of Revenue (DOR), the 2009 Washington State Legislature replaced self-issued resale certificates with Department-issued reseller permits to reduce misuse of the resale system. The Department estimates that state and local governments lose $100 million annually when businesses buy products for their own use rather than for resale, but claim the exemption.

While the DOR has mailed nearly 180,000 permits to businesses since September, it estimates that as many as 20,000 additional businesses, mostly contractors, have not yet applied for a permit.If you believe your business qualifies for the reseller permit, you can apply for one immediately at dor.wa.gov/resellerpermit or by calling 1-800-647-7706.

If you need any assistance in this matter, please contact me at brian.strahle@bakertilly.com or 612.876.4824.

For more information on the law change itself, see my earlier post.