Understanding The Maryland Comptroller’s Recently Reissued Guidance on Resale Certificates

Informal guidance issued by state taxing authorities can be useful even if it does not provide any new information. While this guidance may not be binding, it will provide insight into the current priorities and practices of the department.

The Maryland Comptroller recently reissued guidance on resales as part of the Comptroller’s collection of Sales and Use Tax Tips. View here: Maryland Guidance 

Three things stand out from this guidance:

• While blanket resale certificates are permitted, the Controller expects sellers to periodically review resale certificates to ensure that they are properly completed.
• Maryland does not require any specific form to be used to substantiate exempt sales for resale; vendors are free to accept whatever form they choose. However, this apparently generous policy creates a trap for the unwary: while no specific form is required, the state requires specific information to be included on documentation accepted by a vendor. Certificates must include the buyer’s name, address, Maryland sales and use tax registration number, and a signed statement indicating that the purchase of tangible property or taxable service is intended for resale or will be incorporated into a product or service for sale.
• Maryland has the unusual provision that resale certificates generally may not be accepted for purchases under $200 made by check, cash, or credit card unless the vendor delivers the goods directly to the purchaser’s retail place of business.
  

At CERTifyTax we expect that Maryland will continue to focus aggressively on the validity of exempt sales with particular emphasis on imperfect certificates and in-store purchases. 

The key to protecting against exempt sales exposure is a rigorous business process that is seamless to your staff and customers. If you have questions about your exempt sales in Maryland or other jurisdictions or want to learn about best practices for exempt sellers, please contact the CERTifyTax experts:

Ray Diaz
rdiaz@gmgconsulting.com
(914) 798-9925

Tom McCarthy
tmccarthy@gmgconsulting.com
(914) 798-9902