How to Get a Resale Certificate in Minnesota
How to Get a Resale Certificate in Minnesota
If you buy inventory to resell, you register with the Minnesota Department of Revenue for a Minnesota Tax ID and a Sales and Use Tax account, then give your suppliers Form ST3, Certificate of Exemption, to buy that inventory without paying sales tax. The account also lets you collect sales tax from your customers.
This guide walks you through exactly what you need, the steps to get it, and what to expect along the way. While this content is informational, consult a CPA or tax attorney for questions specific to your situation.
What Is a Minnesota Resale Certificate?
In Minnesota the resale certificate is Form ST3, Certificate of Exemption, which you complete and give to your supplier, marking the resale exemption. Before you make taxable sales, you register with the Minnesota Department of Revenue for a Minnesota Tax ID Number and a Sales and Use Tax account. That registration is what lets you:
- Give suppliers Form ST3 so you can buy inventory for resale without paying sales tax
- Collect sales tax from customers when you make retail sales
- File sales tax returns with the state on the schedule your liability sets
- Legally operate a taxable retail business
The term "resale certificate" is sometimes used interchangeably with "seller's permit" or "sales tax permit," but in Minnesota your registration gives you a Minnesota Tax ID, and the document you hand a supplier to buy for resale is Form ST3. A seller may also accept a buyer's own certificate if it has the required details.
What You'll Need Before You Apply
Before starting, gather these items. Having everything ready speeds up the process:
- Business formation documents. If you've formed an LLC or corporation, have your Articles of Organization or Articles of Incorporation on hand, along with your EIN from the IRS.
- Business address. The address where you operate. Check with the Department of Revenue on what kinds of addresses it accepts.
- Ownership information. Names, addresses, and identification numbers for all owners or members. For sole proprietorships, use your Social Security Number.
- Business description. A clear explanation of what your business does and what products or services you sell.
- Federal Tax ID (EIN). If you have one, have it ready. Sole proprietors may use their Social Security Number instead.
Step-by-Step: How to Get Your Minnesota Resale Certificate
Step 1: Determine If You Need a Resale Certificate
Not every business needs to register for sales tax. You must register if you:
- Make retail sales of taxable goods or services in Minnesota
- Buy inventory to resell at a profit
- Operate a food service, rental, or other taxable business
- Sell into Minnesota from out of state and make 200 or more retail sales, or more than $100,000 of sales, into Minnesota in the prior 12 months (economic nexus)
Some services are taxable in Minnesota, so providing services only does not automatically mean you can skip registration. If you're unsure, the Minnesota Department of Revenue can clarify whether your specific business requires registration.
Step 2: Register Online Through the Minnesota Department of Revenue
The fastest way to get your resale certificate is online through the Minnesota Department of Revenue. Visit the sales tax permit registration page at https://www.mndor.state.mn.us/tp/eservices/_/?link=NewBusinessReg.
You'll create an account on the eServices portal if you don't have one already. The system will walk you through the new business registration process.
Step 3: Complete the Online Application
Fill in the online form with accurate information. You'll provide:
- Your business name and legal business structure (sole proprietorship, LLC, corporation, partnership)
- Physical business address in Minnesota
- Owner or member names, addresses, and identification numbers
- Business start date or anticipated start date
- Detailed description of what your business sells
- Your expected filing schedule (monthly, quarterly, or annual) and accounting method (cash or accrual)
- Information about products or services subject to sales tax
Be as specific as possible when describing your business. If you sell furniture and décor, say that instead of "retail goods."
Step 4: Provide Ownership Documentation
Have these on hand in case the Department of Revenue asks for them (check with the Department for exactly what it requires for your business structure):
- For LLCs: a copy of your Articles of Organization filed with the Minnesota Secretary of State
- For corporations: a copy of your Articles of Incorporation
- For sole proprietorships: your driver's license or government ID
- For partnerships: Partnership Agreement or other formation documents
If you haven't formed your LLC or corporation yet, do that first through the Minnesota Secretary of State before registering with the Department of Revenue. Revenue may require a new Minnesota Tax ID if your business changes its legal organization.
Step 5: Submit Your Application and Wait for Approval
Once you've completed the online form and uploaded required documents, submit it. The Minnesota Department of Revenue will review your application. Check with the Department for current processing times.
If the Department has questions, respond promptly to avoid delays.
Step 6: Receive Your Minnesota Tax ID
Once approved, you'll have your Minnesota Tax ID Number, a seven-digit number used to report and pay Minnesota business taxes. It is not a resale certificate by itself: for resale purchases you give suppliers a completed Form ST3. Write the number down and keep it somewhere safe. You'll use it to:
- Complete Form ST3 for wholesale suppliers when ordering inventory
- File your sales tax returns
- Communicate with the Department of Revenue about your account
Some suppliers will ask for a completed Form ST3 before allowing you to buy at wholesale prices. Have it ready when you start ordering.
Step 7: Set Up Sales Tax Collection and Filing
Registering for a Sales and Use Tax account comes with ongoing obligations. You must:
- Collect sales tax at the point of sale. Minnesota's statewide sales tax rate is 6.875 percent. Some cities and counties add local sales tax, so verify the total rate for your location.
- File sales tax returns. Your filing frequency is based on your monthly sales and use tax liability: annually if it averages less than $100 a month, quarterly from $100 to $500, and monthly above $500.
- Pay sales tax collected. Sales tax is not your money. You're holding it in trust for the state and must remit it according to your filing schedule.
You give your expected filing schedule when you register. You file your returns online, and you can pay online, through the same eServices portal where you applied.
Tips and Common Mistakes to Avoid
Tip 1: Get Your Business Formation Done First
Don't apply for your sales tax permit before you've filed your LLC Articles of Organization or corporate Articles of Incorporation with the Minnesota Secretary of State. Revenue may require a new Minnesota Tax ID if your business changes its legal organization, so settle your structure first. This is especially true if you're forming a business specifically for resale operations.
Tip 2: Use the Online Portal, Not Mail
The Minnesota Department of Revenue takes new business registrations online through Business Tax Registration or by phone. This guide follows the online route through eServices.
Tip 3: Double-Check Your Address
Check with the Department of Revenue on what kinds of addresses it accepts for your account. Make sure you enter your actual business location, even if it's a home-based office. If you move later, you must update your address with the Department of Revenue.
Tip 4: Give Wholesale Suppliers a Completed Form ST3
Once you are registered, give every wholesale supplier you work with a completed Form ST3 with the resale exemption marked. This allows you to buy inventory without paying sales tax. If you don't provide it, you may be charged sales tax on wholesale purchases, which cuts into your margin and creates accounting headaches.
Tip 5: File and Pay on Time
Late sales tax filings and payments can trigger penalties and interest. Mark your filing deadlines on your calendar and file returns on schedule, even if you had no sales during the period. File a zero-return if required.
Common Mistake 1: Confusing Your Resale Certificate With Your Business License
Minnesota does not issue a general statewide business license. Your Sales and Use Tax account is a tax registration, not a business license. You may need separate licenses from individual agencies depending on your industry. Check License Minnesota at mn.gov/elicense to see what specific licenses your business requires.
Common Mistake 2: Buying Products for Personal Use With Your Tax ID
The resale exemption on Form ST3 only applies to products you intend to resell. You cannot use it to buy items for personal use or for use in your operations without paying sales tax. For example, office supplies for your own business are not "resale" and should not be purchased with your tax ID. Using the exemption inappropriately can leave you owing the tax. Check with the Department of Revenue if you are unsure whether a purchase qualifies.
Common Mistake 3: Failing to Register With the Department of Revenue
Some new business owners think they can collect sales tax without registering with the Department of Revenue. This is illegal. You must register for a Sales and Use Tax Account before you make any taxable sales. Making taxable sales without registering can result in back taxes, penalties, and interest.
Common Mistake 4: Not Updating Your Account When Your Business Changes
If you move, change your business structure, add owners, or significantly change what you sell, notify the Department of Revenue. Keeping your account information current prevents problems when you file returns or communicate with the state.
What Happens After You Get Your Resale Certificate
Once your application is approved and you receive your Minnesota Tax ID, you're authorized to operate as a resale business in Minnesota. Here's what to expect:
- You'll have a filing frequency. It depends on your monthly sales and use tax liability, from annual for under $100 a month to monthly above $500.
- You'll receive filing deadlines. Monthly returns are due the 20th of the following month, quarterly returns on April 20, July 20, October 20 and January 20, and annual returns on February 5. Revenue's due date page lists the exact dates.
- You can start collecting sales tax. From the moment your application is approved, you should charge and collect sales tax on all taxable sales.
- You'll pay sales tax collected to the state. When you file a return, you remit the sales tax you collected during the period.
- Keep your account current. Revenue may require a new Tax ID if your business changes its legal organization. If you close your business, you must notify the Department of Revenue to close your account.
When to Seek Professional Help
For most straightforward resale businesses, the online application process is simple and you can handle it yourself. However, consult a CPA or tax professional if:
- You're unsure whether your business needs to register for sales tax
- You sell products across multiple states and need to understand sales tax nexus
- Your business structure is complex (multi-member LLC, partnership, etc.)
- You need help setting up your accounting system to track sales tax correctly
- You have questions about what products are taxable or exempt
A qualified tax professional can ensure you're registered correctly and help you avoid costly mistakes down the road.
Key Takeaways
Getting a resale certificate in Minnesota is straightforward if you follow these steps:
- Form your business (LLC or corporation) if you haven't already
- Register for a Sales and Use Tax Account online with the Minnesota Department of Revenue at https://www.mndor.state.mn.us/tp/eservices/_/?link=NewBusinessReg
- Provide accurate business and ownership information
- Receive your Minnesota Tax ID Number
- Start collecting sales tax and filing returns on schedule
Your Sales and Use Tax account lets you legally collect sales tax from customers, and Form ST3 lets you buy inventory for resale without paying sales tax. Once you have it, manage your account carefully, file returns on time, and keep your business information current with the Department of Revenue.
Disclaimer: This content is informational only and not legal or tax advice. Laws and requirements change, and your specific situation may differ from what's described here. Consult a Minnesota CPA, tax attorney, or the Minnesota Department of Revenue directly for guidance on your particular business.