Md. Code Regs. 03.06.01.14

Current through Register Vol. 51, No. 25, December 13, 2024

Section 03.06.01.14 - Resale Certificates

A. Definitions.

(1) In this regulation, the following terms have the meaning indicated.

(2) Terms Defined.

(a) "Antique" means any item of personal property that:

(i) Was made in an earlier period;

(ii) Has special value because of its age; and

(iii) Is at least 70 years old.

(b) Used Collectible.

(i) "Used collectible" means an item of personal property that has been previously sold at retail as a new item and in which there is a general interest in collecting the item.

(ii) A general interest in the collection of an item is demonstrated by sales of the item at antique and collectible shows and shops or the existence of associations or publications dedicated to the collection of the item.

B. Except as provided in §§C and D of this regulation, the duty of a vendor to collect the sales and use tax from a buyer is waived if the buyer provides the vendor with a signed resale certificate. The resale certificate need not be in a particular form, but it shall state the name, address, and the Maryland sales and use tax registration number of the buyer, and state that the tangible personal property, digital code, digital product, or taxable service is bought for the purpose of resale.

C. Purchases for Less Than $200.

(1) A vendor may not accept a resale certificate from a buyer for purchases of less than $200 using cash, check, credit card, debit card, or electronic transfer of funds, unless the vendor delivers the goods directly to the buyer's retail place of business.

(2) A buyer may obtain a refund of sales and use tax paid on a purchase described in §C(1) of this regulation, if made for resale by claiming a credit on the next sales and use tax return or filing a claim for refund.

D. Sale of an Antique or Used Collectible.

(1) For the sale of an antique or used collectible, the duty of a vendor to collect the sales and use tax from the buyer is waived if the buyer provides the vendor with a signed resale certificate that contains the information set forth in §B of this regulation, except instead of a Maryland sales and use tax registration number, the certificate states that the buyer is an out-of-State vendor who does not sell or deliver tangible personal property or a taxable service for use in Maryland; does not otherwise engage in the business of an out-of-State vendor as described in Tax-General Article, § 11-701(b), Annotated Code of Maryland; or does not meet the thresholds for economic nexus as defined in Regulation .33B(5) of this chapter, and:

(a) Contains:

(i) The sales and use tax registration number of another state; and

(ii) A copy of a sales and use tax registration license issued to the buyer from that state; or

(b) If a buyer is from a state without a sales and use tax, instead of a sales and use tax registration license and number, a copy of a trader's license from that state or a comparable type of identification.

(2) Except as set forth in this section, all other requirements of this regulation including those of §C of this regulation, apply to the sale of an antique or used collectible.

E. A vendor shall obtain a resale certificate before a sale is consummated to support every transaction for which the resale exclusion is claimed. A buyer making repeated purchases from a vendor may provide a blanket resale certificate to the vendor and claim the resale exclusion on subsequent purchases by providing the buyer's Maryland sales and use tax registration number on its purchase orders.

F. When the Comptroller notifies a vendor of an intent to assess the tax on transactions for which the vendor does not possess proper resale certificates, the vendor shall have 60 days from the mailing of this notice to obtain the certificates. If the vendor fails to obtain proper resale certificates within this 60-day period, the Comptroller's assessment is final.

G. A vendor may not accept a resale certificate at any time, including the 60-day grace period, if at the time of acceptance the vendor knows or should know that the sale is not for resale.

H. Maryland sales and use tax registration numbers contain 8 digits, the first of which is always either a zero or a one. Numbers issued by other jurisdictions, federal employer or Social Security numbers, or numbers containing alphabetic characters are not valid on a resale certificate.

I. In third-party drop shipment transactions, in which a Maryland registered vendor sells to an out-of-State unregistered vendor and the property is delivered to a Maryland location, the Maryland vendor shall either require the out-of-State vendor to register for Maryland sales and use tax purposes and provide a proper resale certificate, or charge the tax based on the selling price to the out-of-State vendor. The obligation of the Maryland-registered vendor to obtain a proper resale certificate bearing a Maryland registration number or charge the tax is not changed because the out-of-State vendor is in fact making a sale for resale or the Maryland customer is entitled to the resale exclusion or any other exemption.

J. Vendors may accept resale certificates that bear the exemption certificate number issued to a religious organization instead of a sales and use tax registration number. Sales and use tax exemption certificate numbers issued to religious organizations consist of 8 digits, the first two of which are always "29". Other private exempt entities may not use their exemption certificate numbers on resale certificates. These entities shall register as vendors and use their sales and use tax registration numbers on resale certificates.

Md. Code Regs. 03.06.01.14

Regulation .14 effective April 14, 1971; repealed effective April 4, 1980 (7:7 Md. R. 706)
Regulation .14 adopted effective April 4, 1980 (7:7 Md. R. 706)
Regulation .14 amended effective January 1, 1989 (15:26 Md. R. 2979)
Regulation .14B amended effective August 22, 1980 (7:17 Md. R. 1668)
Regulation .14C amended effective August 22, 1980 (7:17 Md. R. 1668); January 1, 1990 (16:25 Md. R. 2708)
Regulation .14 amended effective March 31, 2003 (30:6 Md. R. 418)
Regulations .14 and A-1 adopted effective December 19, 1994 (21:25 Md. R. 2104)
Regulation .14E amended effective May 28, 2001 (28:10 Md. R. 946); amended effective 49:14 Md. R.704, eff. 7/11/2022