Using a Tennessee resale certificate, a seller can buy tangible personal property without having to pay sales tax. Businesses that want to resell the goods they buy are given this certificate. The certificate certifies that the seller is not the final consumer and has no plans to consume the product. Sellers must have this certificate on file with the state of Tennessee to demonstrate that they are exempt from paying sales tax.
The seller’s name, address, and sales tax identification number are all listed on the one-page Tennessee resale certificate. In addition, it contains the buyer’s name and address, the transaction’s date, and a list of the things being bought. For the certificate to be considered valid, both the buyer and the seller must sign it.
You can get in touch with the Tennessee Department of Revenue if you need to confirm the legitimacy of a Tennessee resale certificate. All state-issued, valid resale certificates are kept in the department’s database. To look up the certificate, you must know the seller’s name and sales tax identification number.
You are exempt from paying sales tax on goods that you intend to resell if you hold a current Tennessee resale certificate. However, you must pay sales tax if you buy something for your own use or consumption. Additionally, if you sell goods online to customers in Tennessee, you might need to collect and submit sales tax.
Depending on your company’s needs, you should choose between an LLC and a sole proprietorship. The simplest and least expensive business form to start up is a sole proprietorship, but it does not provide protection from personal liability. On the other hand, an LLC protects against personal liability and could provide tax advantages, but it is more expensive to form up and manage.
Tennessee law mandates that sole entrepreneurs pay both state and federal income taxes on their net business income. Additionally, the lone owner must deduct and submit state and federal payroll taxes if they have employees. For transactions made to clients in Tennessee, sole proprietors may additionally be obliged to collect and remit sales tax.