Resale Certificate for Tire Shops: Buy Tires Wholesale Tax-Free
Tires are one of the highest-ticket recurring automotive purchases. A set of four passenger tires costs $200 to $800 wholesale. Performance and truck tires run higher. A mid-volume tire shop moves 200 to 500 tires per month, representing $20,000 to $60,000 in wholesale purchases. At 7% tax, that is $16,800 to $50,400 per year in savings from a resale certificate.
The concept is straightforward: tires you buy from distributors to sell and install on customer vehicles are inventory purchased for resale.
What You Can Buy Tax-Free
- Passenger tires (all-season, summer, winter, performance)
- Truck and SUV tires (all-terrain, mud-terrain, highway)
- Commercial truck tires
- Wheels and rims sold at retail (alloy, steel, aftermarket)
- Valve stems and TPMS sensors (installed and transferred to the customer)
- Wheel weights (become part of the customer's assembly)
- Lug nuts and wheel locks (sold to or installed for the customer)
- Tire sealant and repair kits sold at retail
- Automotive accessories sold at retail (floor mats, wiper blades, air fresheners)
What You CANNOT Buy Tax-Free
| Item | Why It Is Taxable |
|---|---|
| Tire mounting machine | Shop equipment |
| Wheel balancer | Shop equipment |
| Alignment rack | Shop equipment |
| Air compressor | Shop equipment |
| Hydraulic lift | Shop equipment |
| Shop hand tools | Business tools |
| Bead lubricant | Consumed during service, not sold |
| Disposal supplies and waste tire containers | Business expense |
Bead lubricant, tire soap, and mounting paste. These are consumed during the installation process. The customer does not take them home and you are not transferring ownership. They are business supplies, not resale items.
Installation and Service Charges
When a customer buys tires, the typical invoice includes the tires themselves, plus mounting, balancing, and possibly alignment. Tax treatment of these service charges varies by state:
States that tax installation labor bundled with a product sale: The full amount (tires plus labor) is taxable.
States that exempt separately stated labor: If you break out the mounting and balancing charge as a separate line item, the labor may be exempt from sales tax while the tires remain taxable.
This affects what you charge customers, not your wholesale buying. Your resale certificate covers the wholesale tire purchase regardless of how you structure the customer invoice.
Tire Disposal Fees
Many states impose tire disposal or recycling fees (typically $1 to $5 per tire). These are environmental fees, not sales tax. Your resale certificate does not affect them. They are charged at both the wholesale and retail level in some states, or only at retail in others.
In states where the fee is embedded in the wholesale price, it is part of your cost. In states where you charge it separately to customers, it may or may not be subject to sales tax depending on state rules.
Wholesale Suppliers
Major tire distributors that will require your resale certificate:
- Tire Rack Wholesale (one of the largest online distributors)
- American Tire Distributors (ATD)
- US AutoForce
- TBC Corporation (Tire Kingdom, NTB, Midas supply)
- Brand-direct (Michelin, Bridgestone/Firestone, Goodyear, Continental, Hankook wholesale programs)
- Regional distributors (varies by market)
Most require your resale certificate plus proof of a physical tire installation location.
Dollar Savings
| Shop Size | Monthly Tire Purchases | Annual Tax Savings (7%) |
|---|---|---|
| Small 2-bay shop | $15,000 | $12,600 |
| Standard tire store | $35,000 | $29,400 |
| High-volume multi-bay | $60,000 | $50,400 |
| Multi-location dealer | $150,000+ | $126,000+ |
Common Mistakes
Treating all installation supplies as resale. Bead lube, soap, and tools used during installation are consumed, not sold. The tires and valve stems are sold; the installation consumables are not.
Not collecting tax on accessory sales. Floor mats, wiper blades, and other accessories sold alongside tire service are taxable retail sales. Do not bundle them into the "labor" charge to avoid tax.
Failing to account for tire disposal fees. These are separate from sales tax and must be tracked and remitted correctly per your state's environmental fee rules.
How to Get Started
- Apply for your resale certificate through your state or our service.
- Provide it to all distributors. ATD, Tire Rack Wholesale, and brand-direct accounts all need it on file.
- Set up your invoicing correctly. Separate tire cost, installation labor, disposal fees, and sales tax on customer invoices.