Your supplier adds sales tax to your dropshipped orders and you pay it, even in states where you have no permit. One streamlined sales tax (SST) exemption certificate is accepted in all 24 streamlined states, and you do not need to be registered there to use it. Kelley Birrell fills out the form box by box, then covers what to do when a state is not on the list.
Sales Tax
Stop Paying Sales Tax with This One Form (Streamlined Sales Tax Resale Certificate Tutorial)
3 min
Transcript
0:00 The form your supplier never mentions
Are you getting charged sales tax by your supplier? You probably don't need to be. There's one form that works in 24 states, and it could save you hundreds or even thousands of dollars on sales tax for dropshipped or supplier purchases. I'll show you exactly how to use it step by step, and at the end I'll cover what to do when this form doesn't work so you're fully covered.
At LedgerGurus, we've helped hundreds of ecommerce sellers solve sales tax headaches. And one of the biggest pain points we see is sellers paying sales tax where they don't have to, especially for dropshipped or supplier orders. That's where the SST resale certificate comes in. It's simple, powerful, and many sellers have no idea it exists.
0:37 What the SST agreement covers
Let's walk through it. The SST, or streamlined sales tax form, is the result of a joint agreement between 24 states to simplify sales tax rules, including resale certificates. These states all accept the same form. So instead of registering in 24 different states, you can fill out one document and you're good. That's a huge win if you're working with vendors across state lines.
Now, to find the form, just Google streamlined sales tax resale certificate or head to streamlinedsalestax.org and look for the exemption certificate. We've also linked it for you below.
1:06 Filling out the form box by box
Let's walk through the form line by line so you know how to fill it out.
In box one, most sellers should leave it blank, so the form is good for multiple purchases. Box two covers the purchaser and seller info. Lines A and B are the purchaser info. That's you. Put your name and business address. Lines C and D are for the vendor or dropshipper charging you sales tax.
Box three is your type of business. Typically, box number 10, retail trade, is the most common. Box four is the reason you want the exemption. Check resale. Box five is where you'll put your ID numbers. Use your home state sales tax ID. If you don't have one, use your FEIN or even your driver's license number. Then sign and date in box six. Once completed, send it to your vendor or supplier.
1:48 When the SST form won't work
This form is accepted by 24 states, even if you're not registered there. That means most of the time it'll stop vendors from charging you sales tax. But if the state isn't on that list, this form won't help you. That's when you should check the MTC form or explore whether you need to register. And yes, we have a whole video on that as well.
This one form can save you a ton of time and money, especially when you have not hit nexus thresholds in the states yet. But when you do start hitting them, it's important to make sure that you register for a permit and start collecting and remitting sales tax.
2:20 Getting help once you cross nexus
That's actually where it starts to get complicated, and that's where LedgerGurus comes in. If you're approaching or past a million dollars in annual sales, this is the point where sales tax stops being a DIY job and starts becoming a compliance risk. We can help you know where you have nexus, handle resale certificates the right way, avoid overpaying and stay audit ready, and connect your sales tax, accounting, and ecommerce platforms. If that sounds like what you need, click on the link in the description to get in touch with us or go to ledgergurus.com. We'll help you stop guessing and start getting sales tax right.
Also, don't forget to grab our free 10 Steps to Ensure Sales Tax Doesn't Burn Down Your Ecommerce Business download. It includes economic thresholds by state and everything you need to check off to stay compliant. The link is also in the description.
Do you have questions about the SST form, or are you getting pushback from a vendor? Drop it in the comments. We read and answer all of them. If this helped, give it a like and share it with other sellers. And don't forget to subscribe.