What Is a Colorado Resale Certificate?
A resale certificate gives business buyers the right to purchase ordinarily taxable goods or services tax-free, provided that they will resell the items or use them as parts of other products they sell. The resale certificate also serves as proof of affiliate nexus for remote sellers.
A Colorado resale certificate is a form that allows businesses to make tax-free purchases of goods on the assumption that they will be reselling them to customers. The form includes important information like the buyer’s name, address, and resale tax permit number, as well as the date and legal basis for the exemption. The resale exemption can be used for both purchasing goods that will be resold, as well as for purchasing the component parts to make those products. It can also be used to purchase taxable services that will be incorporated into the final product. The form must be signed by the business owner or someone authorized to do so.
It’s important to note that not all states accept resale certificates from out-of-state sellers. If you plan to sell in a state that doesn’t recognize your certificate, you will need to obtain a state-specific license instead. However, many states recognize resale certificates issued by other states and the Streamlined Sales Tax Governing Board has created a multistate resale certificate that can be used in multiple states.
How to Get a Colorado Resale Certificate Form?
The standard resale certificate form in Colorado is DR 0563, which can be found on the state’s Department of Revenue website. However, Colorado is a member of the Streamlined Sales Tax Agreement, so buyers can also use a uniform sales and use tax exemption certificate issued by that group. This is a much more convenient option for buyers who are doing business in multiple states. In addition, blanket certificates can be provided for a specific timeframe. To get a Colorado resale certificate, you’ll need to fill out the Uniform Sales and Use Tax Resale Certificate – Multijurisdiction form, which can be downloaded from the Colorado Department of Revenue website
- Download the form: Search for “DR 0563” on the Colorado Department of Revenue website.
- Fill out the form: Carefully complete the form with your business information and any other required details.
- Provide the form to the seller: Give the completed form to the seller at the time of purchase for tax-exempt transactions on goods you intend to resell later. You can also submit it after the purchase, but do so as soon as possible.
Important Notes
- The resale certificate is for obtaining tax-free goods for resale purposes only.
- Colorado also has specific resale certificates for certain property types, like pine or spruce beetle wood (DR 1240), and domestic gas and electricity (DR 1260). Use the appropriate form if applicable.
