--- title: "Sales Tax Exemption Certificates: Collect & Keep | MCC" description: "Get certificates at the time of sale, check them and store them with invoices. Worked example and tracking sheet." url: "https://mcc-solutionsnj.com/bookkeeping/guides/sales-tax-exemption-certificates-record-keeping" --- Bookkeeping guide · Updated October 12, 2026 # Sales Tax Exemption Certificates: Collecting and Keeping When you do not charge sales tax on a sale, the state expects you to be able to show why. For resale and many exempt buyers, the answer is a certificate. Missing certificates are a common cause of assessments, because the seller may owe tax the buyer should have paid. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** A buyer who purchases goods to resell, or who is an exempt organization, can generally avoid paying sales tax by providing a valid certificate. It shifts responsibility only if you accept it properly and keep it; without one, the state may treat the sale as taxable and look to you. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Trial balance explained](/bookkeeping/guides/trial-balance-explained) · [Owner contribution or loan](/bookkeeping/guides/owner-equity-and-capital-contributions) · [Closing entries and retained earnings](/bookkeeping/guides/closing-entries-and-retained-earnings) **Free tools:** [Net profit margin calculator](/bookkeeping/net-profit-margin-calculator) · [Early payment discount calculator](/bookkeeping/early-payment-discount-calculator) [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## Why certificates exist A buyer who purchases goods to resell, or who is an exempt organization, can generally avoid paying sales tax if they provide a valid certificate. The certificate shifts responsibility, but only if you accept it properly and keep it. Without one, the state may treat the sale as taxable and look to you for the tax. Selling into a new state? [Sales tax permit registration](/bookkeeping/sales-tax-permit-registration). Each state has its own forms, and some accept a multi-state form. Download the form from the state's agency. ## Get it at the time of sale The easiest time to get the certificate is before or at the first sale, not after a state letter. Add it to your new customer setup. Pause the first exempt order until the certificate arrives, or charge tax and refund it later. Do not accept a verbal statement. A customer who says they are tax-exempt must provide the paperwork. ## Check the certificate Look at the buyer's name and address, the reason for exemption, the registration number, the date and the signature. Check that the exemption matches what is being bought. A certificate for resale does not cover a purchase the buyer will use themselves. Some states allow you to verify numbers online. Do so for large accounts, and note the verification date. ## Store and link Attach each certificate to the customer's record in your accounting or sales system and mark the customer as exempt for the stated reason. Keep a spreadsheet listing the customer, certificate date, expiration if any, state and location of the file. Certificates may expire or need renewal, so set a reminder. Keep them for the period your state requires, which can be long, and confirm with the agency. ## Want us to handle it? We keep sales tax collected and owed reconciled in your books every month, so returns are quick to file. **Price:** Free review of your books first, then a written quote before any work starts. [Get a free review and quote](/bookkeeping/#interest) ## Handling problems If a customer cannot provide a certificate, charge the tax. If a certificate turns out to be invalid after the sale, speak with your advisor and the state about how to correct it. Do not simply ignore the problem. At return time, report exempt sales separately and be ready to show certificates for each one if asked. ## A sample tracking sheet Set up columns for customer name, state, reason for exemption, certificate number, date received, expiration, the person who checked it and the file name. Sort by expiration so renewals show up first. Review the sheet before each return and confirm every exempt sale in the period has a matching row. When a customer buys under more than one exemption, such as resale for some items and an exempt use for others, note which items the certificate covers and charge tax on the rest. A last practical point concerns staff. Whoever enters orders needs a simple rule, such as no exempt flag without a certificate on file. Without that rule, a well-meaning employee may mark a friendly customer as exempt to be helpful, and the business will carry the cost of that kindness later. ## Worked example with numbers A buyer gives a resale certificate on a $2,000 sale. You keep the signed, dated certificate with the invoice and record the sale as exempt, collecting no tax. If you were audited and could not produce the certificate, tax may be due on that $2,000. At a 6.625% rate that would be $132.50, plus any interest and penalties; confirm the current rate with the NJ Division of Taxation. Build a tracking sheet with the customer, certificate type, date received, expiration if any, and where the file is stored. ## Mistakes that cost money Taking a certificate months after the sale. Accepting an incomplete form. Losing the certificate. Applying an exemption to items the certificate does not cover. ## Check your work Once a year, compare exempt sales on your return to the certificates on file. ## Common questions **Do I need a certificate from every business customer?** Only from those you do not charge tax. A business customer who pays tax does not need one. **Can I accept an electronic certificate?** Many states accept electronic copies, but check the agency's rules. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) More guides - [The Sales Tax Payable Account: Keeping It Accurate](/bookkeeping/guides/sales-tax-payable-account-in-your-books) - [What to Do When a Tax Notice Arrives in the Mail](/bookkeeping/guides/what-to-do-when-you-get-a-tax-notice) - [Building a Response File From Your Books for a Notice](/bookkeeping/guides/building-a-tax-notice-response-file-from-your-books) - [Keeping Audit-Ready Business Records Year-Round](/bookkeeping/guides/keeping-audit-ready-business-records) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Course: [Small Business Bookkeeping Basics](/courses/small-business-bookkeeping-basics) ($49) covers chart of accounts, reconciliations, the monthly close, payroll and 1099 basics for owners. It is training with a certificate of completion, not a credential. ## Rather have us keep the books? Ask for a quote. [Get a Quote](/bookkeeping/#interest)[Call (908) 444-6373](tel:+19084446373)