Which exemptions are common?
| Exemption | Who uses it |
|---|---|
| Resale | Retailers and wholesalers buying goods to resell. See resale certificates |
| Exempt organization | Qualifying nonprofits, schools and churches, depending on the state |
| Government | Federal, and often state and local, government bodies |
| Manufacturing | Machinery or materials used in production, in many states |
| Agriculture | Farm equipment and supplies, in many states |
| Direct pay | Large buyers authorized to pay use tax directly to the state |
Which forms are used?
Each state has its own certificate. Two multistate forms are widely accepted: the Streamlined Sales and Use Tax certificate of exemption, for member states, and the Multistate Tax Commission's uniform sales and use tax certificate, accepted by many states with listed exceptions. Some states accept only their own form for certain exemptions.
How should sellers manage certificates?
Get the certificate at the time of sale
Or within the period the state allows.
Check it is complete
Name, address, exemption reason, permit or ID number, signature and date.
Check it fits the sale
A resale certificate for items the buyer would plausibly resell.
Store it securely
Linked to the customer account, for as long as audits can reach back.
Renew when needed
Some states require periodic updates.
What protects the seller?
A seller that accepts a properly completed certificate in good faith is generally protected even if the buyer later misuses it. Accepting one that is obviously incomplete, or for an item the buyer clearly would not use in an exempt way, can leave the seller liable.
What about marketplaces?
Exempt buyers on marketplaces usually register their exemption with the marketplace itself, which then does not charge them tax. Sellers do not need to collect certificates for those sales. See sales tax audits.
Selling to exempt customers?
We set up a process for collecting and checking exemption certificates and keep them ready for audits.
Questions people ask
What is a sales tax exemption certificate?
A form a buyer gives a seller to show a purchase is exempt, which the seller keeps instead of collecting tax.
Who qualifies for a sales tax exemption?
Commonly resellers, qualifying nonprofits, government bodies and buyers using items in manufacturing or agriculture, depending on the state.
How long should I keep exemption certificates?
For as long as the state can audit the sale, often three to four years or more.
What if I do not have a certificate for an exempt sale?
In an audit, the sale will usually be treated as taxable and you owe the tax.
Sources
Every fee, date and rule on this page was taken from these official and primary sources.
- Streamlined Sales Tax Governing Board: certificate of exemption
- Multistate Tax Commission: uniform sales and use tax certificate
- Texas Comptroller: sales and use tax
Rules and fees change. If you are reading this long after October 1, 2026, confirm the figures with the source before you rely on them.
Related guides
More in Sales tax basics
This guide is general information. It is not tax or legal advice for your situation.