How to Fill Out the Streamlined Sales Tax Certificate of Exemption: A Complete Guide

The Streamlined Sales Tax Certificate of Exemption is essential for businesses purchasing goods or services exempt from sales tax. This certificate ensures compliance with sales tax laws across multiple states, simplifying the process for both buyers and sellers.

In this guide, we’ll explain the step-by-step process of completing the certificate and cover essential tips for accurate and compliant filing.

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What Is the Streamlined Sales Tax Certificate of Exemption?

The Streamlined Sales Tax Certificate of Exemption allows eligible purchasers to buy goods or services exempt from sales tax in participating states. It simplifies multistate compliance by providing a uniform form, but each state has unique requirements for exemptions.

Key Points:

✔️ This is a multi-state form for use in participating states.

✔️ Buyers are responsible for ensuring they meet the exemption requirements in each state.

✔️ Improper use may result in tax liabilities and penalties.

You can download the latest version of this form here.

The form is also available at this link.

Step-by-Step Guide to Completing the Certificate

Step 1: Single or Blanket Certificate

• Single Purchase: Check the box and enter the related invoice or purchase order number.

• Blanket Certificate: Leave the box unchecked to apply the exemption to multiple transactions. The certificate remains effective until canceled or if purchases are more than 12 months apart, unless a longer period is allowed by the state.

Step 2: Purchaser and Seller Information

Provide details for both parties:

Purchaser’s Information:

👉🏼 Name

👉🏼 Business Address

👉🏼 City, State, Country, ZIP Code

Seller’s Information:

👉🏼 Name

👉🏼 Address

👉🏼 City, State, Country, ZIP Code

Step 3: Business Type

Check the box that best describes your business or organization type. Examples include:

01: Accommodation and food services

05: Information, publishing, and communications

07: Mining

17: Nonprofit organization

If no category applies, select 20 (Other) and provide a brief description.

Step 4: Reason for Exemption

Choose the appropriate letter for the exemption reason, such as:

A: Federal government

E: Charitable organization

G: Resale

L: Other (provide an explanation)

Verify with each state to confirm the validity of the exemption claimed.

Step 5: Identification (ID) Number

Enter the required ID number for each state where an exemption is claimed. Depending on your exemption type, the ID number could be:

• Sales Tax ID Number: Issued by the state for resale exemptions.

• Federal Employer Identification Number (FEIN): If no state ID exists.

• Driver’s License Number: If no other ID is available.

Foreign Purchasers: Include a VAT or similar tax ID number if accepted by the state.

Step 6: Certification

Sign and date the form. If submitted electronically, a signature may not be required, depending on the state’s rules.

Important Considerations for Sellers

✅ Records: Maintain completed certificates for exempt transactions.

✅ Verification: Sellers are not typically required to verify the purchaser’s ID number unless mandated by the state (e.g., Georgia).

✅ Liability Protection: Sellers are not liable for improper claims if they:

• Obtain a fully completed certificate.

• Do not solicit unlawful exemptions.

• Submit records as required.

Tips for Using the Certificate Correctly

• Check State Rules: Not all exemptions apply in every state.

• Ensure Accuracy: Double-check all entries, especially ID numbers and exemption reasons.

• Keep Copies: Both buyers and sellers should retain copies for their records.

Common Questions About the Certificate

Q1: What happens if I misuse the certificate?

Misuse can result in penalties, interest, or loss of exemption privileges.

Q2: Can I use this form for drop shipping?

Yes, drop shippers may accept a resale exemption ID, even if issued by another state.

Q3: Is this certificate accepted in all states?

It is valid in participating Streamlined Sales Tax states, but acceptance varies by state and exemption type.

Q4: Do I need a separate certificate for each seller?

Yes, a separate certificate must be completed for each seller.

States Participating in the Streamlined Sales Tax Agreement

The following states accept this form (as of the latest update):

• Arkansas (AR)

• Indiana (IN)

• Kentucky (KY)

• Minnesota (MN)

• South Dakota (SD)

• Utah (UT)

• Wisconsin (WI)

For a complete list and updates, consult the state tax authority websites.

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FAQs

1. What if I don’t have an ID number for a state?

Some states accept other forms of identification, such as a FEIN or driver’s license. Verify with the state for specifics.

2. How long is a blanket certificate valid?

It remains valid until canceled or if transactions exceed a 12-month gap, unless the state allows a longer period.

3. Can sellers refuse this certificate?

Yes, if the seller believes the exemption claim is invalid or inconsistent with state policies.

4. Do I need to renew this certificate?

Renewal requirements vary by state. Check with the applicable state tax authority.