TITLE 63

REVENUE AND TAXATION

CHAPTER 36

SALES TAX

63-3622.  Exemptions — Exemption certificates and resale certificates — Penalties. (a) To prevent evasion of the sales and use tax, it shall be presumed that all sales are subject to the taxes imposed by the provisions of this chapter and the retailer shall have the burden of establishing the facts giving rise to such exemption unless the purchaser delivers to the retailer, or has on file with the retailer, an exemption certificate or resale certificate, in which case the purchaser shall bear the burden of establishing the facts giving rise to the exemption.

(b)  An exemption certificate shall show the purchaser’s name, business name, address, a federal employer identification number or driver’s license number and state of issue, signature, date, and the reason for and nature of the claimed exemption.

(c)  A resale certificate shall be signed and dated by, and bear the name and address of, the purchaser or his agent, shall show the federal employer identification number or driver’s license number and state of issue, shall indicate the number of the permit issued to the purchaser or that the purchaser is an out-of-state retailer, and shall indicate the general character of the tangible personal property sold or rented by the purchaser in the regular course of business. If a purchaser who gives a resale certificate makes any use of the property other than retention, demonstration or display while holding it for sale or rent in the regular course of business, the use shall be taxable to the purchaser as of the time the property is first used by him, and the sales price of the property to him shall be deemed the measure of the tax.

(d)  A seller may accept an exemption certificate or resale certificate from a purchaser prior to the time of sale, at the time of the sale, or at any reasonable time after the sale when necessary to establish the privilege of the exemption. Other than as provided elsewhere in this section, when an exemption certificate or resale certificate, properly executed, is presented to or is on file with the seller, the seller has no duty or obligation to collect sales or use taxes in regard to any sales transaction so documented regardless of whether the purchaser properly or improperly claimed an exemption. A seller so relieved of the obligation to collect tax is also relieved of any liability to the purchaser for failure to collect tax or for making any report or disclosure of information required or permitted under this chapter. The purchaser providing an exemption certificate or resale certificate to a seller shall bear all responsibility and liability for any subsequent audit of the transaction and the seller shall be held harmless. A seller need not accept an exemption certificate or resale certificate that is not readable, legible or copyable.

(e)  Any person who gives an exemption certificate or resale certificate with the intention of evading payment of the amount of the tax applicable to the transaction is guilty of a misdemeanor and punishable by a fine not exceeding one thousand dollars ($1,000) or imprisonment for not more than one (1) year, or by both such fine and imprisonment.

(f)  An exemption certificate or resale certificate shall be substantially in such form as the state tax commission may prescribe. The claim for the exemption may be a part of the documentation on a sales invoice, purchase order, or other documentation retained by the retailer with regard to the sale. Unless the purchaser has an exemption certificate or resale certificate on file with the seller, the purchaser or his agent must sign the exemption claim, which shall be in addition to any other signature which the seller normally requires on sales invoices, purchase orders, or other sales documentation.

(g)  It shall be presumed that sales made to a person who has completed an exemption certificate or resale certificate for the seller’s records are not taxable and the seller need not collect sales or use taxes unless the tangible personal property or services purchased are taxable to the purchaser as a matter of law in the particular instance claimed on the exemption certificate.

History:

[63-3622, added 1992, ch. 16, sec. 6, p. 45; am. 1996, ch. 46, sec. 8, p. 128; am. 1997, ch. 62, sec. 3, p. 124; am. 2021, ch. 282, sec. 1, p. 855.]