Resale Certificates for Amazon Sellers: Complete FBA & FBM Guide

Selling on Amazon can be incredibly profitable—but sales tax compliance is one of the trickiest parts of the business. Whether you're doing retail arbitrage, wholesale, private label, or dropshipping, understanding how resale certificates work can save you thousands of dollars.

This guide covers everything Amazon sellers need to know about resale certificates, including the Amazon Tax Exemption Program (ATEP).

Amazon Selling

Why Amazon Sellers Need a Resale Certificate

As an Amazon seller, you're buying products to resell. That means you qualify for tax-exempt purchasing—but only if you have proper documentation.

The Money You're Losing

Let's say you spend $5,000/month on inventory in a state with 8% sales tax:

That $4,800 goes straight to your profit margin—or it goes to the state unnecessarily.

How It Works for Amazon Sellers

Step 1: Get Your Resale Certificate

You need a resale certificate from your home state (where your business is registered). This involves:

1. Registering for a sales tax permit with your state
2. Receiving your resale certificate (often automatic)
3. Getting your state tax ID number

Step 2: Use It With Suppliers

When buying inventory, provide your resale certificate to:

• Wholesale suppliers
• Distributors
• Retail stores (for arbitrage)
• Online marketplaces
• Trade show vendors

Step 3: Enroll in Amazon Tax Exemption Program (ATEP)

Amazon has a specific program that lets you make tax-exempt purchases ON Amazon itself—useful for arbitrage and wholesale.

Amazon Tax Exemption Program (ATEP)

ATEP allows registered businesses to purchase items from Amazon without paying sales tax (when buying for resale).

How to Enroll in ATEP

1. Go to Amazon Tax Exemption Program

   • Visit amazon.com/tax-exemption-program
   • Or search "Amazon Tax Exemption" in Amazon's help

2. Create Your Tax Exemption Account

   • Log in with your Amazon account
   • Select "Enroll a new tax exemption"

3. Enter Your Business Information

   • Legal business name
   • Business address
   • Tax ID (EIN or SSN)
   • Business type

4. Upload Your Resale Certificates

   • Upload certificates for each state where you're registered
   • Amazon accepts most state formats

5. Wait for Approval

   • Amazon reviews within 1-3 business days
   • You'll receive email confirmation

ATEP Limitations

Be aware of these limitations:

• Only works for purchases FROM Amazon (first-party)
• Third-party seller items may still be taxed
• Some categories are excluded
• You must only buy items genuinely for resale

FBA vs FBM: Tax Considerations

Fulfillment by Amazon (FBA)

With FBA, Amazon stores your inventory in their fulfillment centers across the country. This creates nexus (tax presence) in multiple states.

What This Means:

• You may need to collect sales tax in states where Amazon stores your inventory
• Those states may require you to register for sales tax permits
• You'll need resale certificates for each state where you buy inventory

States with Major Amazon Fulfillment Centers:

• California
• Texas
• Florida
• Pennsylvania
• New Jersey
• Illinois
• And many others

Fulfillment by Merchant (FBM)

With FBM, you ship orders yourself. Your nexus is simpler—typically just your home state and states where you have significant sales (economic nexus).

Tax Considerations:

• Fewer state registrations typically required
• Still need resale certificate for inventory purchases
• Economic nexus thresholds still apply

Multi-State Issues for Amazon Sellers

Economic Nexus

Since the 2018 South Dakota v. Wayfair ruling, states can require you to collect sales tax based on sales volume, even without physical presence.

Common Thresholds:

• $100,000 in sales, OR
• 200 transactions

Once you exceed these thresholds in a state, you must:

1. Register for a sales tax permit in that state
2. Collect and remit sales tax on sales to that state
3. File regular sales tax returns

Do You Need Multiple Resale Certificates?

For buying inventory: Generally, one certificate from your home state works for most out-of-state purchases. However, some states require their own certificate.

States requiring in-state registration:

• California
• Florida
• Hawaii
• Illinois
• Louisiana
• Maryland
• Massachusetts
• Washington
• Washington D.C.

If you're buying significant inventory from suppliers in these states, you may need to register there.

Amazon Business Types and Resale Certificates

Retail Arbitrage

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

Using your certificate:

• Present at checkout when buying clearance/discounted items
• Not all stores accept resale certificates (call ahead for large purchases)
• Keep detailed records of what you bought and resold

Stores that commonly accept certificates:

• Target
• Walmart
• Costco (Business membership)
• Big Lots
• Office supply stores

Online Arbitrage

What it is: Buying products online (other websites) and reselling on Amazon.

Using your certificate:

• Many online retailers have tax exemption programs
• Upload certificate to your account
• May need to contact seller support for some sites

Sites with exemption programs:

• Target.com
• Walmart.com
• Staples.com
• Many B2B wholesalers

Wholesale

What it is: Buying directly from manufacturers or authorized distributors.

Using your certificate:

• Most wholesalers REQUIRE a resale certificate
• Standard practice in the industry
• Usually kept on file for all future orders

Private Label

What it is: Creating your own branded products.

Using your certificate:

• Tax-free purchases of raw materials
• Manufacturing components
• Packaging materials
• Labels and branding materials

Dropshipping

What it is: Selling products without holding inventory; supplier ships directly to customer.

Using your certificate:

• You still need one even though you don't touch inventory
• Present to your supplier for tax-free purchases
• You're still the seller of record

Record Keeping for Amazon Sellers

Proper records are crucial for audits. Keep:

Purchase Records

• All invoices showing tax-exempt purchases
• Copies of resale certificates given to suppliers
• Date and location of each purchase

Sales Records

• Amazon seller reports
• Sales by state
• Tax collected and remitted

Inventory Records

• What you bought
• What you sold
• Items withdrawn for personal use (you owe use tax on these)

Recommended Tools

• QuickBooks or similar accounting software
• Inventory management software
• Sales tax automation tools (TaxJar, Avalara)

Common Mistakes Amazon Sellers Make

Mistake 1: Using Certificate for Personal Purchases

Even if you find a great deal, you cannot use your resale certificate for items you'll keep personally. This is tax fraud.

Mistake 2: Not Registering in States with FBA Nexus

If Amazon stores your inventory in a state, you likely have nexus there. Register before it becomes a problem.

Mistake 3: Ignoring Economic Nexus

Track your sales by state. Once you hit thresholds, register promptly.

Mistake 4: Not Keeping Records

When audited, you need to prove items were purchased for resale. No records = no proof = back taxes.

Mistake 5: Using Expired Certificates

Some certificates expire. Check your state's requirements and renew as needed.

Setting Up Your Amazon Business for Tax Compliance

Checklist for New Amazon Sellers

1. ☐ Register your business (LLC, Sole Prop, etc.)
2. ☐ Get an EIN from the IRS (if not sole proprietor)
3. ☐ Register for sales tax in your home state
4. ☐ Obtain your resale certificate
5. ☐ Enroll in Amazon Tax Exemption Program
6. ☐ Set up tax collection in Seller Central
7. ☐ Consider sales tax automation software
8. ☐ Establish record-keeping system

Checklist for Established Sellers

1. ☐ Review current state registrations
2. ☐ Check for economic nexus obligations
3. ☐ Verify all certificates are current
4. ☐ Audit your tax-exempt purchases
5. ☐ Update ATEP with new certificates
6. ☐ Review supplier documentation

Sales Tax Collection on Amazon

While this guide focuses on resale certificates (what you pay), remember you also need to collect sales tax on your Amazon sales.

Good news: Amazon now handles sales tax collection and remittance in most states through their Marketplace Facilitator program. They collect and remit on your behalf.

What you still need to do:

• Register in states with nexus (for your records)
• File $0 returns in some states
• Handle any exempt customers
• Keep compliant records

Get Help With Your Amazon Tax Setup

Navigating sales tax as an Amazon seller is complex. ResaleCertificate.org can help you:

• Obtain resale certificates for all 50 states
• Understand your nexus obligations
• Get registered quickly and correctly

Get Your Resale Certificate →

Selling on multiple platforms? Contact us for multi-state guidance.