California State Board of Equalization (BOE or SBE) Proposes Amendments to Resale Certificate Regulation

The California State Board of Equalization (BOE or SBE) has scheduled a public hearing on an amendment to Regulation 1668, Sales for Resale. According to the BOE the purpose of the amendment is clarify the acceptable language in purchase orders taken by a seller in support of a valid resale certificate.

One method of overcoming the presumption in California sales tax law that any sale of tangible personal property is subject “at retail” and therefore subject to sales tax is to obtain a valid resale certificate from the purchaser at the time of the sale. Regulation 1668, Sales for Resale provides that if a purchaser wants to issue a blanket resale certificate, it may do so, and state on the resale certificate “see purchase order.” The purchase order then has to state that the sale was for resale.

Under the proposed amended regulation the purchaser can use the phrase “non taxable,” “taxable = no” or other similar terminology on the purchase order to indicate that the sale is for resale.

Making sure to obtain a qualified resale certificate is one way to alleviate a variety of sales tax problems. If your company has sales tax problems contact the sales tax lawyers at Brager Tax Law Group, A P.C.