Exemption/Resale Certificates

Q: DO EXEMPTION CERTIFICATES EXPIRE? HOW OFTEN SHOULD I REQUEST UPDATED EXEMPTION CERTIFICATES?

A: In most states, certificates do not expire. However, as a best practice, we suggest updating certificates every three to four years. Many things can change in three to four years. For example, maybe the certificate was valid when it was issued, but some event has invalidated the certificate. Anything that changes a tax number could invalidate a certificate. Changes in ownership, changes in entity type, and even company relocation to a new state are some of the more common problems we see, but there are more. Having invalid certificates on file can be a ticking time bomb while at the same time providing you with a false sense of security.

Q: DOES THE DATE ON AN EXEMPTION CERTIFICATE NEED TO BE DATED BEFORE THE 1ST SALE MADE TO THAT COMPANY?

A: No, it does not need to be dated before the first sale. Some states identify a specific amount of time after the sale that you can get a certificate, and other states may say it should just be completed in a reasonable amount of time. If you're audited, almost all states allow you to go back and get missing or invalid certificates, only now they are subject to additional verification. California may or may not allow you to use an XYZ letter, but California is the only state that allows this process. In all other states, you will have to get the missing certificate or a corrected certificate if it was kicked by the auditor.