eBay Seller's Guide to Resale Certificates

Whether you're flipping thrift store finds, running a full-time eBay business, or selling wholesale inventory, understanding resale certificates can significantly impact your bottom line. This guide covers everything eBay sellers need to know.

eBay Selling

Do eBay Sellers Need a Resale Certificate?

Short answer: Yes, if you're running a business.

If you're regularly buying items specifically to resell on eBay, you're operating a business and should have a resale certificate. It allows you to purchase inventory without paying sales tax—saving you money on every purchase.

Who Needs One

The Savings Add Up

Let's say you spend $2,000/month on inventory:

eBay's Marketplace Facilitator Status

Good news for eBay sellers: eBay now collects and remits sales tax in most states as a marketplace facilitator.

What This Means

• eBay automatically calculates sales tax on your sales
• eBay collects from buyers at checkout
• eBay remits to the appropriate states
• You don't have to handle sales tax collection

What You Still Need to Do

Even with eBay handling collection:

1. Register in your home state - You still need a sales tax permit
2. Get your resale certificate - For tax-free inventory purchases
3. File returns - Some states require $0 returns even if eBay remits
4. Track everything - Maintain records for your tax filings

Using Your Certificate for eBay Inventory

Retail Arbitrage

Buying from retail stores to resell:

Where to use your certificate:

• Target
• Walmart
• Costco (Business membership)
• Big Lots
• Department stores
• Outlet malls

Tips:

• Call ahead for large purchases
• Not all stores accept certificates
• Some require manager approval
• Keep detailed receipts

Wholesale Purchasing

Buying from wholesale suppliers:

Certificate is usually required to:

• Open wholesale accounts
• Access wholesale pricing
• Buy in bulk

Thrift Stores and Garage Sales

Generally, you won't use your certificate here because:

• Thrift stores often don't charge sales tax on used items
• Private sellers (garage sales) don't charge sales tax
• Consignment stores vary

Online Wholesale Suppliers

Many require a resale certificate to sell to you:

• Wholesale Central
• DollarDays
• Kole Imports
• Brand-specific authorized distributors

eBay Tax Exemption Program (STEP)

eBay has a Sales Tax Exemption Program that allows registered businesses to make tax-exempt purchases on eBay itself.

How to Enroll in STEP

1. Go to eBay Tax Exemption
2. Sign in with your eBay account
3. Complete business information
4. Upload resale certificates for each state
5. Wait for verification (usually 1-3 days)

Benefits of STEP

• Tax-free purchases on qualifying eBay items
• Certificate on file for all purchases
• Easy verification process

Limitations

• Only works for eligible business purchases
• Not all sellers participate
• Must only use for resale inventory

Types of eBay Selling Models

Model 1: Retail Arbitrage

What it is: Buying discounted items at retail and reselling on eBay.

Certificate usage:

• Use at retail stores when buying
• Significant savings on clearance hauls

Logistics tip: As your volume grows, consider using a fulfillment service like 3PLGuys to handle storage and shipping, especially for larger items.

Model 2: Online Arbitrage

What it is: Buying deals online and reselling on eBay.

Certificate usage:

• Enroll in tax exemption programs (Amazon, Target, etc.)
• Use eBay STEP for eBay purchases

Model 3: Wholesale

What it is: Buying in bulk from wholesalers/distributors.

Certificate usage:

• Required for most wholesale accounts
• On file for all orders

Model 4: Thrift/Estate Flipping

What it is: Sourcing from thrift stores, estate sales, auctions.

Certificate usage:

• Limited use (most don't charge tax)
• May apply at some consignment stores

Model 5: Dropshipping

What it is: Listing items you don't hold; supplier ships to buyer.

Certificate usage:

• Provide to your supplier
• Buy tax-free even though you don't hold inventory

Multi-Channel Selling

Many eBay sellers also sell on:

• Amazon
• Poshmark
• Mercari
• Facebook Marketplace
• Their own website

Managing Inventory Across Channels

For serious multi-channel sellers, inventory management becomes critical. Tools like Raidframe can help you:

• Sync inventory across platforms
• Prevent overselling
• Track profitability by channel
• Manage listings efficiently

Tax Implications

Each platform may have different marketplace facilitator rules. Track sales by platform and state for proper reporting.

Record Keeping for eBay Sellers

What to Track

Why It Matters

1. Tax preparation - Calculate actual profit
2. Audit protection - Prove resale intent
3. Business analysis - Know your true margins

Tools to Help

• Accounting software: QuickBooks, Wave
• eBay integration: Link directly to accounting
• Spreadsheet tracking: At minimum, for small operations

Common eBay Seller Tax Questions

"Do I need to collect sales tax from buyers?"

No—eBay handles this as a marketplace facilitator in most states.

"Do I need to report eBay income on my taxes?"

Yes! eBay reports to the IRS via 1099-K if you exceed thresholds. Report all income regardless.

"Can I deduct my eBay fees?"

Yes—eBay fees, shipping supplies, and other business expenses are deductible.

"What if I buy something for resale but keep it?"

You technically owe use tax on items withdrawn from inventory for personal use. Track this carefully.

"Do I need a business license to sell on eBay?"

Requirements vary by location. Check your city/county requirements.

State Considerations for eBay Sellers

Home State Registration

You need to register for a sales tax permit in your home state, even if eBay collects tax.

Economic Nexus

If you have significant sales to other states, you may need to register there too. Common threshold: $100,000 in sales.

Record Requirements

Keep records for at least 3-7 years depending on your state.

Growing Your eBay Business

Scaling Tips

1. Systemize sourcing - Regular routes and schedules
2. Batch listing - Efficient photography and descriptions
3. Standardize shipping - Consistent packaging and carriers
4. Track metrics - Know your numbers

When to Get Help

As you grow, consider:

• Prep centers - For preparing inventory
• 3PL fulfillment - For storage and shipping
• Virtual assistants - For listings and customer service
• Accountant - For tax compliance

A fulfillment partner like 3PLGuys can be a game-changer when you're drowning in inventory and shipments.

Getting Started Checklist

1. ☐ Register your business with your state
2. ☐ Get your EIN (if not sole proprietor)
3. ☐ Apply for sales tax permit
4. ☐ Obtain resale certificate
5. ☐ Set up business bank account
6. ☐ Enroll in eBay STEP
7. ☐ Set up accounting/tracking system
8. ☐ Establish relationships with suppliers

Get Your Resale Certificate

Stop paying unnecessary sales tax on your eBay inventory. Get your resale certificate and start saving today.

Apply for Your Resale Certificate →

Have questions about eBay selling and taxes? Contact our team for help.