Do You Need a Resale Certificate to Sell on Etsy? Complete Guide
Etsy is home to millions of creative entrepreneurs selling handmade goods, vintage items, and craft supplies. But when it comes to sales tax and resale certificates, many Etsy sellers are confused about what's required.
The answer isn't always straightforward—it depends on what you sell and how your business operates.
Handmade Crafts
The Short Answer
Do you need a resale certificate to sell on Etsy?
- If you buy finished products to resell: Yes
- If you make handmade items from raw materials: Yes (for materials)
- If you sell vintage items you already own: Maybe not
- If you dropship or use print-on-demand: Yes
Let's break down each scenario.
Understanding the Etsy Business Models
1. Handmade Goods Sellers
This is Etsy's bread and butter—artisans creating unique products.
Examples:
- Jewelry makers
- Clothing designers
- Pottery artists
- Woodworkers
- Candle makers
- Soap crafters
Do you need a resale certificate? Yes—for your supplies
When you buy raw materials that become part of your finished products, you can purchase those tax-free with a resale certificate.
What you can buy tax-free:
| Category | Examples |
|---|---|
| Jewelry Making | Beads, wire, clasps, gemstones, chains |
| Sewing/Clothing | Fabric, thread, buttons, zippers, elastic |
| Candles | Wax, wicks, fragrance oils, dyes |
| Woodworking | Lumber, stains, hardware, finishes |
| Pottery | Clay, glazes, kiln supplies |
| Soap Making | Oils, lye, fragrances, molds |
What you CANNOT buy tax-free:
- Tools (sewing machine, kiln, cutting tools)
- Equipment for your workspace
- Office supplies
- Packaging that doesn't transfer with the product
2. Vintage Sellers
Selling items that are 20+ years old.
Do you need a resale certificate? It depends
- Items you already own: No certificate needed—you already paid tax when you bought them years ago
- Items you buy specifically to resell: Yes, you can use a resale certificate
Example scenarios:
| Scenario | Certificate Needed? |
|---|---|
| Selling grandma's vintage jewelry | No |
| Buying at estate sales to resell | Yes |
| Selling your old record collection | No |
| Purchasing vintage items from dealers | Yes |
3. Craft Supplies Sellers
Selling supplies to other crafters.
Do you need a resale certificate? Yes
If you're buying craft supplies wholesale to resell to other Etsy sellers or crafters, you absolutely need a resale certificate.
4. Print-on-Demand Sellers
Using services like Printful, Printify, or Gooten.
Do you need a resale certificate? Yes
Even though you never touch the inventory, you're still the seller. Provide your resale certificate to your POD provider to avoid paying tax on the products they create for you.
POD platforms that accept certificates:
- Printful
- Printify
- Gooten
- CustomCat
- SPOD
5. Dropshippers
Selling products that ship directly from a supplier.
Do you need a resale certificate? Yes
You need to provide your certificate to your dropship suppliers.
What About Sales Tax Collection?
Having a resale certificate is about what you pay when buying supplies or inventory. But you also need to understand what you collect from customers.
Etsy Handles Most Sales Tax Now
Good news: Since 2019-2020, Etsy has become a "marketplace facilitator" in most states. This means:
- Etsy automatically calculates sales tax
- Etsy collects it from your customers
- Etsy remits it to the states
You don't have to do anything for orders processed through Etsy in most states.
States Where You May Still Have Responsibilities
A few states have different rules or may still require you to:
- Register for a sales tax permit
- File $0 returns
- Handle exempt customers
Check your specific state's requirements.
How to Get Your Resale Certificate as an Etsy Seller
Step 1: Register Your Business
If you haven't already:
- Choose a business structure (most Etsy sellers start as sole proprietors)
- Register your business name if needed
- Get an EIN from the IRS (optional for sole proprietors)
Step 2: Register for a Sales Tax Permit
Visit your state's Department of Revenue website and:
- Complete the sales tax registration
- Provide your business information
- Pay any registration fees (usually free or minimal)
Step 3: Receive Your Resale Certificate
In most states, you'll automatically receive a resale certificate with your permit, or you can download the form and fill it out with your permit number.
Step 4: Provide to Suppliers
Give your certificate to:
- Wholesale craft supply companies
- Local craft stores (Joann, Michaels, etc.)
- Online suppliers
- Print-on-demand providers
Using Your Certificate at Popular Craft Stores
Joann Fabrics
- Offers a Tax Exempt program
- Enroll online or in-store
- Once approved, tax is automatically removed
Michaels
- Tax exemption available for businesses
- Contact your local store or visit michaels.com
- May need to present certificate at each purchase
Hobby Lobby
- Accepts resale certificates in-store
- Present at register when purchasing
- Some locations keep certificates on file
Online Suppliers
Many wholesale craft suppliers require a resale certificate to even open an account:
- Create for Less
- Rio Grande (jewelry)
- Fabric.com
- Wholesale supplies online
Common Questions from Etsy Sellers
"I just started selling—do I really need this?"
If you're buying any supplies or materials for your products, getting a resale certificate from day one will save you money. Even small purchases add up.
Example: If you spend $200/month on supplies with 7% tax, that's $168/year you're losing unnecessarily.
"My business is small—does this apply to me?"
Yes! There's no minimum sales threshold for using a resale certificate. Whether you sell $100/year or $100,000/year, you can buy supplies tax-free.
"What if I'm just doing this as a hobby?"
If you're selling items and making money, you're operating a business in the eyes of the state. You should be properly registered.
"Can I use my certificate at regular stores?"
Yes, for items you'll use in products you sell. Not all stores make it easy, but many accept certificates. Call ahead for large purchases.
"What about supplies I use AND sell?"
If you buy supplies that you both use yourself and resell, only the portion for resale qualifies for tax exemption. Either:
- Make separate purchases
- Allocate percentages and track carefully
Record Keeping for Etsy Sellers
Keep organized records of:
Purchases:
- Receipts for all supply purchases
- Copies of certificates given to suppliers
- What supplies were used for which products
Sales:
- Etsy sales reports
- Sales by state (for your records)
- Any exempt sales
Why it matters: If audited, you need to prove your tax-exempt purchases became products you sold.
Tax Deductions vs. Tax Exemption
Don't confuse these two concepts:
| Tax Exemption (Resale Certificate) | Tax Deduction |
|---|---|
| Avoid paying sales tax on purchases | Reduce taxable income on federal/state returns |
| Applies at time of purchase | Applies when filing income taxes |
| Only for items to be resold | Includes business expenses not for resale |
| State sales tax | Federal/state income tax |
You should take advantage of BOTH:
- Use your resale certificate to avoid sales tax
- Deduct business expenses on your tax return
Getting Started Checklist for Etsy Sellers
- ☐ Register your business with your state
- ☐ Apply for a sales tax permit
- ☐ Obtain your resale certificate
- ☐ Set up accounts with wholesale suppliers
- ☐ Enroll in tax exemption programs at craft stores
- ☐ Provide certificate to POD providers (if applicable)
- ☐ Set up bookkeeping system
- ☐ Understand Etsy's marketplace facilitator status
Start Saving on Your Craft Supplies
Every dollar you save on sales tax is a dollar that goes to your bottom line. Get your resale certificate and start buying supplies tax-free.
Apply for Your Resale Certificate →
Have questions about tax requirements for your Etsy business? Contact our team for help.