Can a non-Texas retailer use a multi-jurisdictional resale certificate instead of a Texas Resale Certificate when buying from Texas vendors?

Plain-English Summary

A tax professional asked the Comptroller whether an out-of-state retailer could give Texas vendors a multi-jurisdictional resale/exemption certificate, combined with a form affidavit, instead of a Texas Resale Certificate. The Comptroller's answer was mixed. On the good-news side, a legitimate non-Texas retailer's out-of-state permit number is acceptable on a Texas Resale Certificate in place of a Texas permit number under Rule 3.285(d), and the retailer is not required to obtain a Texas Limited Sales and Use Tax Permit just to buy goods tax-free for resale outside Texas.

However, the proposed workaround — a multi-jurisdictional certificate plus an affidavit, instead of the Texas form — would likely leave the Texas vendor unprotected. Texas law requires a properly completed resale certificate containing specific information (Tex. Tax Code § 151.054(a) and § 151.152; Rule 3.285(d) and (g)), and the Comptroller noted that most multi-jurisdictional certificates reviewed over the years are incomplete under Texas's specific requirements. Even paired with an affidavit, such a certificate would probably be insufficient to relieve the Texas vendor of liability for uncollected tax.

What This Means For You

If you are a non-Texas retailer buying from Texas vendors for resale outside Texas, the safest approach is to give the vendor a properly completed Texas Resale Certificate listing your home-state (non-Texas) retailer's permit number, rather than relying on a multi-jurisdictional resale/exemption certificate or a custom affidavit. Doing so avoids the risk that the Texas vendor is later assessed tax because the certificate on file was deemed incomplete or insufficient under Texas-specific rules. Texas vendors accepting a certificate from an out-of-state buyer should likewise insist on the Texas form (with the buyer's non-Texas permit number) rather than a multi-jurisdictional certificate, to preserve their good-faith protection from liability for uncollected tax.

Q&A

Q: Can a non-Texas retailer use its home-state sales tax permit number on a Texas Resale Certificate?
A: Yes. A legitimate non-Texas retailer's permit number is acceptable on a Texas Resale Certificate in lieu of a Texas permit number, per Rule 3.285(d).

Q: Does a non-Texas retailer need a Texas sales tax permit to buy tax-free for resale?
A: No, not merely as a prerequisite to buying tax-free from Texas vendors for resale outside Texas.

Q: Is a multi-jurisdictional resale certificate (with an affidavit) a safe substitute for the Texas Resale Certificate?
A: Probably not. The Comptroller found most multi-jurisdictional certificates reviewed are incomplete under Texas's specific statutory requirements, and even combined with an affidavit, such a certificate would likely be insufficient to protect the Texas vendor from tax liability on the sale.

Citations

• Tex. Tax Code § 151.054(a)
• Tex. Tax Code § 151.152
• 34 Tex. Admin. Code Rule 3.285(d) and (g)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9408L1313E09

Original ruling text

August 24, 1994

Dear **:

Ray Bonilla asked me to respond to your letter of August 15, on his behalf. You
ask whether your client, a non-Texas retailer, may issue a form affidavit and
other documents to Texas retailers in lieu of a Texas Resale Certificate. The
good news is that a legitimate non-Texas retailer's permit number is acceptable
on a Texas Resale Certificate in lieu of a Texas permit number. See Rule
3.285(d), enclosed. Your client is not required to obtain a Texas Limited Sales and
Use Tax Permit purely as a prerequisite to buying items from Texas vendors tax
free for resale elsewhere in the United States. Please note that paragraph (d)
requires the resale certificate to contain certain specific information.

Under separate cover, I'm sending you multiple copies of our resale certificate
form. You may reproduce as many as you need. Your client, as a bona fide
retailer, is free to issue one to any Texas vendor from whom he buys goods for
resale in the United States.

Unfortunately, the alternative you propose would afford little or no protection
to a Texas vendor. Our law requires a retailer to obtain a properly completed
resale certificate to substantiate a tax-free sale for resale. Section 151.054(a),
Texas Tax Code. Most multi-jurisdictional resale and exemption certificates we
have reviewed over the years are incomplete under our rather specific law. See
Sec. 151.152, Texas Tax Code and Rule 3.285(d) and (g). Even in combination
with the affidavit you offer, a multi-jurisdictional certificate would probably
be insufficient to relieve a Texas vendor of liability for uncollected tax.
(Obviously, I would have to see the actual certificate before I could judge its
validity.)

Happily, I believe your client's needs are adequately served by issuing
properly completed Texas certificates containing his non-Texas retailer's
number. Your client should feel free to refer any hesitant Texas vendor to this
office for any necessary reassurance.

This opinion is based on the facts presented. Different facts, though similar,
might lead to different results. If you have further questions or need
additional assistance, please feel free to write or call me at 1-800-531-5441,
extension 3-3889.

Sincerely,

John Christian
General Law, Legal Services Division

NOTE: Previous Accession Number 9408530L