Do I need to charge sales tax when reselling?
When you must collect
Sales tax rules vary by state. You typically need to collect when you have 'nexus'—a physical presence (home, warehouse, employee) or economic nexus (exceeding a state's sales threshold, often $100,000 or 200 transactions).
If you sell through Amazon, eBay, Etsy, or similar marketplaces, those platforms are usually required to collect and remit sales tax on your behalf in states with marketplace facilitator laws. That covers most online sales, but you may still need to register and file returns in some states.
- Physical presence: home, storage, or office in the state
- Economic nexus: typically $100k in sales or 200 transactions per state
- Marketplace facilitator laws: platform collects for you
- Resale certificate: lets you buy inventory tax-free
Resale certificates and exemptions
When buying inventory for resale, you can usually avoid paying sales tax by giving the seller a resale certificate (also called a sales tax permit or exemption certificate). This requires registering for a sales tax permit in your state.
If you sell to buyers in another state where you don't have nexus, you generally don't collect that state's tax. But if you sell to a buyer in your own state, you may need to collect unless the marketplace does it for you.
Common mistakes
- Thinking you never need to collect because you're 'just a reseller'—you may still have registration and filing obligations.
- Not using a resale certificate when buying inventory, which means paying sales tax upfront and reducing profit.
- Assuming marketplace collection covers all states; some states still require you to register and file zero returns.