Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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475.0000 RESALE CERTIFICATES—Regulation 1668

Annotation 475.0105

475.0105 Invalid Permit Number. A taxpayer began charging a customer sales tax when it learned that the permit number shown on its resale certificate was no longer valid. The customer is now requesting a refund from the taxpayer of the sales tax reimbursement charged.

A resale certificate operates to relieve the seller from liability for sales tax if taken: (1) in good faith, (2) from a person who is engaged in the business of selling tangible personal property, and (3) from a person who holds a valid seller's permit. If the taxpayer had been issued a resale certificate by a customer during the period the customer did not have a valid seller's permit, the buyer could not have issued a valid resale certificate. Therefore, any sales to it would be presumed to be at retail until established otherwise. There is no provision for curing a resale certificate issued during a period in which the purchaser did not hold a valid seller's permit by back dating a seller's permit. However, if it could be proven to the satisfaction of the Board that the specific property was in fact resold by the purchaser and was not used by it, the taxpayer would be entitled to a refund of the taxes paid on those sales, provided that such amounts are returned to the customer. 2/21/95.