How to EASILY Get a Resale Certificate for Dropshipping | Summary and Q&A

TL;DR

Learn how to avoid paying sales taxes to your drop shipper in states where you are not registered by using the SST or MTC form, except for 10 states that require separate registration.

Key Insights

• 💦 Drop shippers may charge sales tax for orders in states where they have Nexus, even if you are not registered there.
• 💦 Resale certificates, such as the SST or MTC form, can be provided to drop shippers to avoid sales tax in states without Nexus.
• 💁 The SST form is more flexible and doesn't require separate registration, while the MTC form covers additional states.
• ❓ There are 10 states where separate registration is necessary to obtain a resale certificate.

Transcript

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Questions & Answers

Q: Why do drop shippers want to charge sales tax in states where I'm not registered?

Drop shippers charge sales tax because they have Nexus in those states, which requires them to collect taxes. However, if you provide a resale certificate, they shouldn't charge you sales tax anymore.

Q: What kind of certificate should I provide to my drop shipper?

You can provide the SST or MTC form as a resale certificate. The SST form covers 35 states without requiring individual registration, while the MTC form covers additional states not included in the SST form.

Q: Which states require separate registration for resale certificates?

There are 10 states, including California and Illinois, where you need to register individually to obtain a resale certificate. A list of these 10 states will be provided in the description.

Q: What should I do if my drop shipper doesn't accept the SST form?

Send them the instructions page on the second page of the SST form, which clearly states the types of identification accepted. Circle the section for clarity and reassure them that the form is accepted by all participating states.

Summary & Key Takeaways

• Drop shippers may want to charge you sales tax for customer orders in states where they have Nexus, even if you are not registered in those states.

• You can provide a resale certificate to your drop shipper, such as the SST or MTC form, to avoid sales tax in states where you don't have Nexus.

• The SST form is flexible and accepts various identification numbers, while the MTC form covers states not included in the SST form.