Why it matters
An exempt sale without a valid certificate can become tax the seller owes, plus penalty and interest. The certificate is the support for the exemption, and it has to match the state and the goods sold.
Example
A retailer buys inventory from a wholesaler and gives the wholesaler a resale certificate with the retailer's sales tax permit number. The wholesaler does not charge sales tax on the inventory.
Related terms
Questions about Resale certificate
Does a resale certificate work in every state?
Not always. Some states accept a multi-state or Streamlined certificate, and some require their own form. Check the rules for the state where the sale is taxable.