Kentucky Resale Certificate, Form 51A105

What is Form 51A105?

Form 51A105, Resale Certificate, is the exemption form a Kentucky retailer issues to its supplier to purchase goods or inventory without paying sales tax at the time of purchase, because the goods will be resold in the regular course of business to the end consumer. The certificate covers tangible personal property, digital property and the taxable services it cites, bought for resale, lease or rental, or for use in manufacturing or industrial processing of property that will be resold. It is published by the Kentucky Department of Revenue; the blank above is Form 51A105, revision (1-23).

Who may issue a resale certificate

To use a resale certificate, a Kentucky retailer must apply for and maintain an active sales tax account: the certificate states that the purchaser holds a valid Sales and Use Tax Permit and gives the account number. A nonresident purchaser that is not required to register and obtain a permit in Kentucky may also issue the certificate to a Kentucky seller; it must note that status on the face of the certificate.

The certificate may not be issued for the purchase of accommodations, sewer services, or admissions (KRS 139.200(2)(a)-(c)). Contractors or other persons registered under a consumer number in the 900,000 series may not issue a resale certificate for any purchase, and a seller who accepts a certificate from such a person is held liable for the sales or use tax.

How to fill out Form 51A105

1. Check the applicable block at the top: Blanket or Single Purchase. A single-purchase certificate covers one transaction. With a blanket certificate the seller may keep it on file; for later purchases under it, no new certificate is needed only if the character of your operations has not changed and the purchases are of the kind you usually make for resale.
2. Enter the name and address of your business.
3. In the certification, enter the name of the permit holder and its Sales and Use Tax Permit account number (a nonresident purchaser not required to register and obtain a permit in Kentucky must state that status on the face of the certificate instead), then describe the business it is engaged in (selling, leasing or renting, industrial processing or manufacturing).
4. On the "purchase from" line (captions Name of Seller, Address), enter the seller's name and address, then describe the product to be purchased.
5. Sign as owner, partner or corporate officer, add your title and the date. The certificate is signed under penalties of perjury and is not valid unless completed.
6. Give the completed certificate to the seller.

What the certificate commits you to

By signing, you certify that the property or taxable services described will be resold, leased or rented, or used in the manufacture or industrial processing of property that will be resold, as the certificate's cited statutes and regulation provide. If anything purchased under the certificate is used for any other purpose than retention, demonstration or display while holding it for sale, lease or rental, you are required by law to report and pay the tax measured by its purchase price. Improper use of the certificate is subject to the penalties provided by law, including the criminal provisions of KRS 139.990(1).