Form S-3 - Purchases For Resale And By Exempt Organizations

Instructions for Use of the Resale Certificate of Exemption (Form S-3)

(This exemption certificate does not apply to contractors)

This exemption certificate applies to the following:

This exemption certificate is not

Purchase(s) of tangible personal property for the purpose

•

for use by contractors. Materials

of resale

purchased for use in construction do

• Purchase(s) by an organization which is religious,

not qualify as purchases for resale.

educational, or scientific and is designated as a 501(c)(3)

Contractors are required to pay sales

by the Internal Revenue Service

tax on tangible personal property

incorporated into real estate.

• Purchase(s) by a Federal or Vermont governmental unit

(direct payment)

• Purchase(s) by a volunteer fire department, ambulance

company or rescue squad

Please note: Civic, social, recreational, and business league organizations are not 501(c)(3) organizations, and

therefore cannot make exempt purchases.

Acceptance in “Good Faith”

A seller who accepts an exemption certificate in “good faith” is relieved of liability for collection or payment of

the Vermont Sales and Use Tax otherwise due on tangible personal property covered by the certificate. Good faith

depends upon a consideration of all the conditions surrounding the transaction. To receive an exemption in good

faith, a seller is presumed to be familiar with the law and the regulations pertinent to the business in which the

seller deals. In order for good faith to be established, all of the following conditions must be met:

a. The buyer must present the certificate prior to or at the time of the purchase of the property.

b. The certificate must contain no statement or entry which the seller knows, or has reason to know, is false or

misleading.

c. The certificate is on an exemption form issued by the Vermont Department of Taxes or a form with

substantially identical language.

d. The certificate must be dated and complete and in accordance with published instructions.

e. The Vermont Sales and Use Tax account number is provided on the certificate where applicable

f. The property to be purchased is of a type ordinarily used by the buyer for the purpose described on the

certificate.

Improper Certificate/Lack of Certificate

Sales of tangible personal property subject to tax which are not supported by properly executed exemption

certificates are taxable retail sales. The burden of proof that the tax was not required to be collected is upon

the seller.

Retention of Certificates by the Seller

Sellers must retain exemption certificates for at least three years from the date of the last sale covered by the

certificate to document why tax was not collected from the buyer.

Multiple Purchase Exemption Certificates

If the buyer presents a “Multiple Purchase” exemption certificate to the seller, it may be used only when purchasing

tangible personal property for use as indicated on this exemption certificate. For each purchase covered by

the exemption certificate, the sales slip or invoice must show the buyer’s name and address sufficient to link the

purchase to the exemption certificate on file.

Other types of exemption certificates that may be applicable are available on our website at:

For questions regarding how these exemption certificates may be properly applied, please contact the Vermont

Department of Taxes at (802) 828-2551, option #3.

Form S-3 - Purchases For Resale And By Exempt Organizations - 2013 Page 2

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