Resale Certificate for Gas Stations: Fuel, Snacks, and C-Store Inventory Tax-Free
Gas stations are two businesses in one: fuel sales and convenience retail. The fuel side has its own excise tax structure. The c-store side works like any retail store. A resale certificate covers the retail inventory side, saving a station owner thousands per year on snacks, beverages, tobacco, and merchandise purchased for resale.
A typical gas station with a c-store spends $20,000 to $60,000 per month on non-fuel inventory. At 7% tax, that is $16,800 to $50,400 per year in unnecessary sales tax.
Fuel vs. C-Store: Two Different Tax Systems
Motor fuel (gasoline, diesel) is subject to federal and state excise taxes calculated per gallon, not as a percentage of price. These excise taxes are embedded in the wholesale price your fuel supplier charges. In most states, motor fuel is exempt from sales tax or handled through the excise tax system. Your resale certificate typically does not affect fuel taxes.
C-store inventory (everything inside the building) follows standard sales tax rules. Your resale certificate exempts these wholesale purchases from sales tax. You collect sales tax from customers at the register.
This means the resale certificate primarily benefits the c-store side of your operation. But given that c-store margins (25-35%) far exceed fuel margins (often under 5%), protecting the profitability of your inside sales matters enormously.
What You Can Buy Tax-Free (C-Store Inventory)
- Tobacco products (cigarettes, cigars, smokeless, vaping products)
- Beverages (soda, water, energy drinks, juice, coffee beans for your coffee bar)
- Snacks and candy (chips, nuts, jerky, chocolate, gum, mints)
- Packaged food (sandwiches, hot dogs, pizza slices, roller grill items before cooking)
- Beer and wine (if licensed)
- OTC medicine (pain relievers, cold medicine, vitamins)
- Auto supplies (motor oil, washer fluid, air fresheners, phone mounts)
- General merchandise (phone chargers, batteries, lighters, sunglasses)
- Lottery ticket stock (where applicable)
- Ice and bagged ice
- Coffee cups, lids, and supplies (for your self-serve coffee station)
For a detailed breakdown of c-store inventory rules, see our convenience store guide.
What You CANNOT Buy Tax-Free
| Item | Why It Is Taxable |
|---|---|
| Fuel pump equipment | Business equipment |
| Underground storage tanks | Business property |
| Canopy and signage | Business property |
| Refrigeration units and coolers | Store equipment |
| Car wash chemicals and equipment | Business use (if car wash is a service) |
| POS system and payment terminals | Business equipment |
| Security cameras | Business equipment |
| Squeegees and windshield fluid at pumps | Given away free, not sold |
Windshield squeegees and water at the pump: You provide these free to customers. Since they are not sold, they are a business expense, not a resale item. Same with free air (if your station offers free tire inflation).
Dollar Savings (C-Store Inventory Only)
| Station Type | Monthly C-Store Inventory | Annual Tax Savings (7%) |
|---|---|---|
| Small rural station | $8,000 | $6,720 |
| Suburban station | $25,000 | $21,000 |
| High-volume urban station | $50,000 | $42,000 |
| Multi-station operator (5 locations) | $200,000+ | $168,000+ |
Common Mistakes
Not presenting the certificate at wholesale clubs. If you run to Costco or Sam's for emergency restocks, present the certificate. Many station operators forget and pay retail tax.
Mixing personal purchases with store inventory. That energy drink and bag of chips for yourself? Not resale. This is the most common audit flag for gas station owners.
Treating car wash supplies as resale. If your car wash is a service (customer pays for a wash), the soap and chemicals are consumed in providing that service. They are not resold. If you sell bottled car wash soap at retail, that is resale.
How to Get Started
- Apply for your resale certificate at your state tax authority or through our service.
- Provide copies to your distributors. McLane, Core-Mark, tobacco distributors, and your beverage suppliers.
- Set up your POS tax tables. Fuel, grocery, prepared food, tobacco, and general merchandise may all have different tax rates.
- File regularly. High-volume stations typically file monthly.