Fong: Beware of Web Sites Selling Sales Tax Certificate

Bismarck, N.D. – Tax Commissioner Cory Fong today warned North Dakota businesses and residents to be wary of companies or web sites that sell sales tax resale certificates that supposedly allow buyers to avoid paying sales tax.

“We’ve heard that there are web sites that are trying to sell sales tax resale certificates,” said Fong. “Businesses and individuals need to be cautious when dealing with companies that try to charge a fee for these or other tax identification numbers.”

The Tax Department does not charge a fee for sales tax certificates issued by the Department and it does not release taxpayer permit numbers for private use. Fong recommends that businesses avoid dealing with any company that tries to sell a North Dakota sales tax form, permit, or certificate.

Fong said, “We want people to know that if they are approached by a company trying to sell a sales tax resale certificate or other tax identification number, it is probably a scam. The certificate number or identification number is phony and the company is likely trying to gather the consumers’ credit card and personal information.”

Any individual or business that makes taxable retail sales is required to hold a North Dakota sales tax permit. To receive a permit, the business or individual applies to the state Tax Department for a sales tax permit. The Tax Department does not charge a fee for the permit. Permit holders file sales tax returns to report sales made and to pay any sales tax collected on their sales.

Businesses making purchases of items intended for resale do not pay sales tax on the supplies to the vendor. Instead, they need to complete a resale certificate at the time they make the purchase. Businesses or individuals needing a resale certificate can download it free from the Tax Department’s web site at www.nd.gov/tax.

“The seller keeps the resale certificate to document the exempt sale,” said Fong. “And later on, when the business sells the item, they will need to collect the sales tax from the customer and then report and pay the tax they collected to the Office of State Tax Commissioner.”

For more information about sales tax permits, resale certificates, or other tax matters, visit the Tax Department’s web site at www.nd.gov/tax or follow the Tax Department on facebook.