"Is the EIN enough?"
It's the most common question first-time wholesalers ask. It's also the most common way they get burned.
When a retailer opens a wholesale account with you, they'll hand over something: an EIN, a W-9, a business license, a "tax-exempt number." Sellers swap the same advice constantly — "we've never collected those forms, we just take the EIN."
Why an EIN doesn't do the job
An EIN is a federal ID for income tax and payroll. A W-9 tells you where to send a 1099. Sales tax is a state matter — and the only document that lets you legally skip charging it on a wholesale order is a resale certificate that's valid in the state that governs the sale.
And if you sold tax-free without one? In an audit, the state doesn't chase your buyer. It bills you — the tax you didn't collect, plus penalties and interest, on every one of those invoices.
What makes a certificate valid
What counts varies by state, but the recurring tests are:
- The right form. Many states require their own; some accept the MTC or SST multistate forms, and some don't.
- Every field completed. Blank buyer details or a missing description of the property are the usual gaps.
- A registration number in that state's format.
- A signature.
- An expiration date you need to track, in the states that set one.
What to do instead
Collect the certificate before the first tax-free shipment. Keep the EIN in the file too — it's just not the document that saves you.
Once one is on file, the next question is whether it holds up — see how to verify a resale certificate is valid for the checks an auditor actually applies. Our free validator runs the document-level ones in about 30 seconds, no signup required; if you're handling more than a handful a month, our plans cover the ongoing tracking.
General education, not tax advice — your state's Department of Revenue or a SALT professional is the authority for your situation.