How to EASILY Get a Resale Certificate for Drop Shipping

Now in this scenario, a resale certificate is one type of exemption certificate that you can provide to your drop shipper. So then the question is, what kind of certificate do they accept?

Now, we did a video here about sales tax for drop shipping in general, and we also did one on the MTC and SST forms as well. I really suggest you go watch those videos.

0:45 When to use the SST or MTC form

When should you be using one of these forms? Well, if you are a seller, if you use a drop shipper, if they're asking you for exemption certificates for states that you're not currently registered in because you don't have nexus there yet, but they're charging you sales tax unless you provide a resale certificate, then this is when you should use the SST or the MTC form.

Those two forms cover about 35 states, and you don't need to register individually in each of those states. You can provide your home state identification, and if you use the SST form, it's even more flexible. You can use your driver's license number, your FEIN or a Social Security number. If you are an international seller, they'll accept any form of international identification number.

1:26

Here's the really cool thing. You don't need to register with any of the states in order to use the SST form, and you don't have to already be part of the SST form in order to use it either. So this is a really cool form to use.

The next one is the MTC form. Whatever states you can't find on the SST form, go look for them on the MTC form. If you can find them there, use that for your resale certificate.

There are 10 states that you will need to register with in order to get a resale certificate. California is one and Illinois is another. We'll include a list of those 10 states in the description below. But the good news is that of the 45 states that require sales tax, you can use the SST or the MTC form to provide resale certificates for 35 of them, and your drop shipper shouldn't charge you sales tax anymore.

2:14 What to do if they won't accept it

Now, we've also seen people saying, okay, I sent them the SST form, but they're not accepting it. What do I do?

You send them the instructions page. On the second page of the SST form there's a section that specifically states what kind of identification you can use on that form, and there are lots of different options, like I mentioned earlier.

Send your drop shipper the instructions and tell them that this is the right form. All of these states have agreed that they will accept it. These are the types of IDs that you can provide. You are providing one of these types. They will accept it.

We've dealt with this scenario with many clients, and sometimes they just need a little bit of a push. So again, all you need to do is send them the second page of the instructions. Make sure that you circle that section that specifically states what kind of IDs the state will accept.

2:59 Recap

So to conclude, if you are using a drop shipper and they are asking you to provide a resale certificate in states where you do not yet have nexus, so that they will stop charging you sales tax on your customer's orders, then you need to use the SST or the MTC form, except for the 10 states that those forms don't cover. And they're really easy to fill out.

Let us know in the comments if you have any other questions. And as always, if you found this video helpful, make sure that you like and share it so that other people can get this great information as well. We'll see you in the next video. Bye.