Roughly a dozen states and the District of Columbia are commonly listed as jurisdictions that don’t accept out-of-state resale certificates, but the working list is shorter than that once you look at what each state’s rules actually say. Six jurisdictions genuinely require you to register locally before buying tax-free: California, Florida, Massachusetts, Illinois, Maryland, and Washington, D.C. Several others on the typical “no” lists — Alabama, Virginia, Washington state, Hawaii, and Louisiana — will accept an out-of-state certificate if you meet their conditions.
States That Require You to Register Locally First
In these jurisdictions, handing over your home-state resale certificate at the register won’t stop the seller from charging sales tax. You either register with the state’s tax authority first or pay the tax and try to recover it on the back end.
- California. You need a seller’s permit from the California Department of Tax and Fee Administration. Once registered, you can issue and accept California resale certificates; without one, an out-of-state certificate is not sufficient on its own.1California Department of Tax and Fee Administration. Doing Daily Business – Tax Guide for Out-of-State Retailers
- Florida. Florida issues its own Annual Resale Certificate for Sales Tax to registered businesses. Out-of-state dealers who don’t hold one are directed to separate administrative rules for documentation.2Florida Department of Revenue. Annual Resale Certificate for Sales Tax
- Massachusetts. Form ST-4 requires a valid Massachusetts vendor registration. A seller who accepts a certificate without that registration number gets no audit protection.3Massachusetts Department of Revenue. Form ST-4 Sales Tax Resale Certificate
- Illinois. An Illinois registration number is required for tax-exempt resale purchases, and blanket certificates used in Illinois should be refreshed at least every three years.4Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate – Multijurisdiction
- Maryland. In-state registration is required rather than acceptance of out-of-state certificates.
- Washington, D.C. Registration with the D.C. Office of Tax and Revenue is required.
States Often Listed as “No” That Actually Accept Certificates With Conditions
Several states appear on published “do not accept” lists but have policies that are more flexible than those lists imply. Read the conditions for each state you plan to buy in.
Alabama
Alabama is one of the most commonly misidentified states. The Alabama Department of Revenue states that out-of-state retailers can purchase tax-free in Alabama as long as they hold a valid sales tax license in their home state.5Alabama Department of Revenue. Can I Use an Out-of-State Sales Tax License to Purchase Tax-Free in Alabama The state’s administrative code confirms that all buyers of property for resale may purchase at wholesale tax-free when they hold the required sales tax license, and the rule applies to retailers located outside Alabama.6Alabama Administrative Code. Rule 810-6-1-.144.03 – Resale, Sales For You do not need an Alabama-specific license.
Virginia
Virginia allows sellers to accept resale certificates issued by other states, provided the out-of-state certificate contains the same information found on Virginia’s Form ST-10.7Virginia Tax. Rulings of the Tax Commissioner 97-329 The flexibility is specific to resale certificates; Virginia does not extend it to other types of exemption certificates from other states.
Washington
Washington issues its own reseller permits, and businesses registered in the state need to include that permit number on certificates. If you’re not required to register in Washington, sellers may accept the Multistate Tax Commission’s uniform certificate, the Streamlined Sales Tax exemption certificate, or another certificate authorized by the Department of Revenue.8Cornell Law Institute. Washington Administrative Code 458-20-102 – Reseller Permits The pivot point is whether your activities in Washington trigger a registration requirement. If they do, you need the Washington permit.
Hawaii
Hawaii’s tax structure works differently. It imposes a general excise tax on businesses rather than a traditional sales tax on consumers, and there is no full exemption for resale purchases. A valid resale certificate lets the seller report the transaction at a lower wholesale rate instead. Hawaii does accept the Multistate Tax Commission’s uniform certificate for this purpose,9Hawaii Department of Taxation. TIR 93-5 – Use in Hawaii of the Uniform Sales and Use Tax Certificate but only to qualify for the reduced rate, not as a general exemption.
Louisiana
Louisiana has a dedicated form for purchases by out-of-state buyers. The seller should not accept it unless the out-of-state dealer provides proof of registration or a license number from their home state.10Louisiana Department of Revenue. Purchases for Resale by Foreign Purchaser Louisiana accommodates out-of-state businesses, but with documentation that goes beyond simply handing over a certificate.
Multistate Certificates That Cover Most Other Jurisdictions
Two standardized forms exist to smooth interstate purchases. Neither is universally accepted, but together they reach most of the country.
The MTC Uniform Certificate
The Multistate Tax Commission reports that 36 states have indicated its Uniform Sales and Use Tax Resale Certificate can be used as a resale certificate.11Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate The certificate stays valid until the buyer cancels it in writing or the state revokes it, though some states impose periodic renewal. Michigan caps blanket certificates at four years; Illinois and Vermont expect an update at least every three.4Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate – Multijurisdiction Acceptance of the MTC form doesn’t override a state’s separate requirement that you register locally, so check the individual state before relying on it.
The SST Exemption Certificate
The Streamlined Sales Tax project has its own exemption certificate, accepted by all 24 member states: Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.12Streamlined Sales Tax. Exemptions The SST certificate is particularly useful in states like Washington and Vermont, which appear on “no” lists but participate in the Streamlined agreement.
Registering to Buy Tax-Free Can Create Nexus
Before you rush to register in California, Florida, or another strict state, understand what registration signs you up for. Registering for a sales tax permit in another state can establish sales tax nexus there. Once you have nexus, you may have to collect and remit sales tax on all your sales to customers in that state, not just avoid tax on your wholesale purchases. Filing obligations continue even in periods with no sales.
Most states impose economic nexus thresholds for remote sellers, commonly triggered at $100,000 in gross sales or, in some states, 200 separate transactions. Some set different thresholds: Alabama uses $250,000 in sales of tangible personal property, and California sets $500,000.13Streamlined Sales Tax. Remote Seller State Guidance If you’re already above the threshold, you probably have nexus regardless. If you’re below it, registering solely to buy tax-free could create obligations that outweigh the savings. For businesses that buy in a state only occasionally, paying the tax and claiming a credit on your home state’s use tax return can be the simpler path.
Drop Shipping in the Strict States
Drop shipping is where the “you must register locally” rule bites hardest. When an out-of-state retailer asks a supplier to ship directly to a customer in one of the strict states, whether tax gets charged turns on whether the retailer holds a local permit.
California shows the pattern clearly. If the out-of-state retailer does not hold a California seller’s permit, the drop shipper must charge the retailer tax based on the retail amount and pay it to the state. The retailer can pass that cost along, but not as a line-item “California sales tax” on the customer’s invoice. If the retailer does hold a California permit, they can issue the drop shipper a resale certificate and take on the tax responsibility themselves.14California Department of Tax and Fee Administration. Drop Shipments and Resale Certificates The same dynamic recurs in the other strict states. If you drop ship frequently through suppliers in one of them, a local permit often costs less than absorbing tax on every shipment.
States With No Sales Tax
Five states impose no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. There is no sales tax to exempt in those states, so resale certificates aren’t needed. Alaska is a partial exception because some local jurisdictions impose their own sales taxes, so businesses buying in certain Alaska municipalities should check local rules.