Roofing Contractors: How a Resale Certificate Saves You Thousands on Materials

Roofing is one of the most material-intensive trades in construction. A single residential re-roof can require $8,000 to $15,000 in shingles, underlayment, flashing, decking, and fasteners. At a typical sales tax rate of 6% to 10%, that means $500 to $1,500 in sales tax on every job, money that comes directly out of your margin.

If your state allows roofing contractors to use a resale certificate for materials, those savings multiply across dozens of jobs per year. This guide covers how resale certificates apply to roofing, which materials qualify, and how to manage certificates across multiple projects.

Roofing Materials

The Real Cost of Sales Tax on Roofing Materials

Roofing materials are expensive, and tax adds up quickly. Here is what the numbers look like on typical residential and commercial jobs.

Residential Re-Roof Example

Commercial Roofing Example

Commercial jobs involve even higher material costs. A 10,000-square-foot TPO or EPDM roof can easily require $25,000 to $40,000 in materials. At 7.25% tax, that is $1,800 to $2,900 per job.

Use our savings calculator to estimate your annual tax savings based on your actual material spend and local tax rate.

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Which Roofing Materials Qualify

When a resale certificate is valid for your type of work and state, the following materials are typically covered.

Materials Incorporated into the Customer's Property

• Shingles: Asphalt, architectural, three-tab, composite, wood shake, slate, tile
• Underlayment: Synthetic underlayment, felt paper, ice and water shield
• Flashing: Step flashing, valley flashing, chimney flashing, drip edge
• Decking: OSB, plywood, and replacement boards
• Fasteners: Roofing nails, cap nails, screws
• Sealant and adhesive: Roofing cement, caulk, adhesive for membrane systems
• Ventilation components: Ridge vents, soffit vents, turbine vents
• Membrane systems (commercial): TPO, EPDM, PVC, modified bitumen

Materials That Do NOT Qualify

Even with a valid resale certificate, these items are for business use and remain taxable:

• Ladders, scaffolding, and fall protection equipment
• Nail guns, compressors, and other power tools
• Tarps used to protect the work area (not left with the customer)
• Dumpsters and waste disposal
• Vehicle expenses and fuel
• Safety gear (harnesses, hard hats, gloves)

The distinction is straightforward: if the material becomes part of the customer's roof, it may qualify. If it stays with your crew, it does not.

How Roofing Contract Types Affect Tax Treatment

The way you structure your contracts can affect whether you are treated as a reseller or a consumer of materials. This varies by state, but the general principles are consistent.

Lump-Sum Contracts

In a lump-sum contract, the customer pays a single price for the complete roofing job. Labor and materials are not itemized separately. In most states, this structure treats the contractor as the consumer of materials. You pay tax when you buy materials and do not charge the customer sales tax on materials.

Time-and-Materials (Separated) Contracts

In a time-and-materials contract, you itemize the cost of materials separately from labor. Some states allow contractors using this structure to treat the materials portion as a resale. You would buy materials tax-free with your resale certificate and charge the customer sales tax on the materials line item.

Retail Contractor Designation

A few states, such as Nebraska, have a specific "retail contractor" classification. Contractors who register as retail contractors buy materials tax-free and collect sales tax from customers on the materials they install. This is essentially treating the materials portion as a retail sale.

Which Structure Is Best?

There is no universal answer. The best contract structure depends on:

• Your state's sales tax rules
• Whether the customer is tax-exempt (government, nonprofit)
• Your pricing strategy and competitive positioning
• Administrative burden of collecting and remitting sales tax

Consult with a tax professional who understands contractor rules in your state before changing your contract structure. For a deeper look at how contract type affects tax treatment, see our construction materials sales tax guide.

State-by-State Treatment for Roofing Contractors

States differ significantly in how they treat contractors who install materials into real property. Here is a summary of common approaches.

States Where Contractors Are Generally Consumers

In these states, roofing contractors typically pay sales tax on materials at the time of purchase. The customer is not charged separate sales tax on materials.

California, Texas, Florida, New York, Illinois, Ohio, Pennsylvania, Georgia, North Carolina, Virginia, Michigan, New Jersey, Massachusetts, Indiana, Wisconsin, Maryland, Colorado, Minnesota, Missouri, Tennessee, Louisiana, Kentucky, Oregon (no sales tax), South Carolina, Alabama, Oklahoma

Note: Even in these states, exceptions may exist for separated contracts, government projects, or specific material types.

States Where Contractors May Be Treated as Resellers

In these states, some or all roofing contractors can purchase materials tax-free and charge customers sales tax.

Arizona: Contractors performing prime contracting activities are subject to a transaction privilege tax. Materials may be purchased tax-free if the contractor collects tax on the project.

Mississippi: Contractors may be treated as resellers for materials incorporated into real property.

New Mexico: Contractors are generally treated as sellers of the materials they install. Gross receipts tax applies to the total contract price.

Nebraska: Contractors can elect "retail contractor" status, buying materials tax-free and collecting sales tax from customers.

Hawaii: General excise tax applies broadly; treatment of contractors differs from most states.

Important Caveats

State rules change, and local jurisdictions may impose additional requirements. Always verify current rules with your state's department of revenue or a qualified tax advisor.

Managing Resale Certificates Across Multiple Jobs

Roofing contractors often juggle dozens of active projects, multiple suppliers, and purchases across different jurisdictions. Here is how to keep your certificate management organized.

Keep Certificates on File with Every Supplier

Submit your resale certificate to every supplier you use, including roofing distributors (ABC Supply, Beacon Building Products, SRS Distribution), big-box stores, and local yards. Once on file, the exemption applies automatically.

Track Exempt vs. Non-Exempt Purchases

Not every purchase qualifies. Use job-costing software or a simple spreadsheet to flag:

• Exempt purchases: Materials incorporated into customer projects
• Non-exempt purchases: Tools, equipment, office supplies, safety gear

Allocate Materials to Specific Jobs

During an audit, you may need to show that tax-exempt materials were used on customer projects, not for personal use or non-qualifying purposes. Allocating material purchases to specific job numbers creates a clear paper trail.

Multi-State Operations

If you work in multiple states, you may need separate resale certificates for each state. Keep a checklist of:

• Which states you hold certificates in
• Expiration dates for each
• Which suppliers have each state's certificate on file

Renewal Reminders

Set calendar reminders 60 days before each certificate expires. Some states issue certificates that do not expire (like Texas), while others require annual or periodic renewal. If a certificate lapses, your suppliers must begin charging tax.

Tips for Maximizing Your Savings

Buy in Bulk When Possible

Wholesale pricing combined with tax exemption creates significant savings. If you have storage space, buying shingles and underlayment in bulk for upcoming jobs locks in both lower unit costs and tax-free treatment.

Negotiate with Distributors

Roofing distributors expect to negotiate. Your resale certificate signals that you are a legitimate business customer. Use your volume to negotiate better pricing on top of the tax savings.

Review Every Invoice

Mistakes happen. Suppliers occasionally charge tax on exempt accounts due to system errors, new employees, or account setup issues. Review every invoice and flag discrepancies immediately.

Separate Personal and Business Accounts

Never use your tax-exempt contractor account for personal purchases. This is the fastest way to lose your exemption privileges and trigger an audit.

Get Your Resale Certificate and Start Saving

For a roofing contractor completing 30 to 50 jobs per year, the tax savings from a resale certificate can easily reach $15,000 to $40,000 annually. That is money that goes straight to your bottom line.

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Have questions about how resale certificates apply to roofing in your state? Contact our team for guidance.

Related Articles

• Construction Materials Sales Tax: The Complete Guide - Comprehensive coverage of how contract type and state rules affect your material tax obligations.
• How a Resale Certificate Helps Contractors Win More Bids - Translate your material tax savings into more competitive bids.
• Buying Construction Supplies Wholesale Tax-Free - Step-by-step guide to setting up tax-exempt accounts with roofing distributors and supply houses.
• Contractor License Requirements by State - Make sure your license is in order alongside your resale certificate.