How to Get a Resale License in NC: Registering and Using Form E-595E

To get a resale license in NC, register for a free sales and use tax account with the North Carolina Department of Revenue (NCDOR). The state does not issue a document called a “resale license.” What you actually receive is a sales and use tax account ID number, which you then write onto Form E-595E, the Streamlined Sales and Use Tax Certificate of Exemption, and hand to suppliers so they don’t charge you the 4.75% state sales tax (plus local tax) on inventory you plan to resell.¹ Most online applicants get the account number instantly.

The exemption exists so sales tax isn’t collected twice on the same item. Your supplier skips it; you collect it from your customer at the final retail sale. The authority is N.C.G.S. § 105-164.28.²

One thing to be clear about before you start: this registration is not a general business license and does not authorize you to operate a business in North Carolina. Any city or county permits your business needs are separate.

Registering With the NCDOR

Registration is free, and you can do it two ways.³

Online

The NCDOR’s Online Business Registration system is the fastest route and has replaced the paper Form NC-BR for most applicants. In most cases, the system issues your account ID number right after you submit the form, with a mailed confirmation arriving within five business days. If the system can’t finish registration immediately, you get a tracking number and your account ID within ten business days.⁴

By Mail

If you prefer paper, download Form NC-BR from the NCDOR website and mail it to the address printed on the form. Processing takes longer than online. Check the current mailing address on the NCDOR site before sending, since PO Box assignments change.

What to Have Ready

Whether you go online or by mail, you’ll need the following information:⁴

Your Social Security Number if you’re a sole proprietor, or your Federal Employer Identification Number, plus your North Carolina Secretary of State number if you have one.
The business’s legal name, any trade or “doing business as” name, physical and mailing addresses, and phone number.
Your entity type (sole proprietorship, partnership, LLC, or corporation) and the date you began or plan to begin operating.

Giving Form E-595E to Your Suppliers

Once your account ID is issued, nothing arrives in the mail that looks like a traditional “license” or “permit” to show at checkout. You download Form E-595E, fill in your name, address, registration number, business type, and the reason the purchase is exempt (resale), and provide it to each supplier you buy inventory from.⁵

In-person certificates have to be signed and complete. For purchases placed online or by phone, the seller needs the same data but no physical signature; the seller just has to keep the information in a retrievable format.²

For suppliers you buy from regularly, you can issue a blanket certificate that covers all future qualifying purchases, so you aren’t filling out a new form every order. The blanket certificate stays valid as long as the recurring purchases continue. If you stop buying from a supplier and then start again, provide a fresh certificate.

Drop Shipments

If you drop ship, the supplier shipping directly to your customer needs resale documentation from you. North Carolina’s statute allows a third-party vendor to accept a certificate of exemption or other evidence of a resale exemption from its retailer customer, regardless of whether that retailer is registered to collect sales tax in North Carolina.² Without that documentation on file, the supplier may have to charge you sales tax.

After You’re Registered: Collecting and Filing

Having the account ID also means you’re now on the hook to collect sales tax from your customers and send it to the NCDOR on Form E-500. The NCDOR sets your filing frequency based on how much tax you owe each month and will notify you if that frequency changes:⁶

Quarterly, if you consistently owe less than $100 per month. Returns are due by the last day of the month after each calendar quarter.
Monthly, if you consistently owe between $100 and $20,000 per month. Returns are due by the 20th of the following month.
Monthly with prepayment, if you consistently owe $20,000 or more per month. You must prepay at least 65% of the next month’s estimated liability when you file.

File every period you’re assigned, even if sales were zero. A missing return creates problems quickly, and willfully failing to file a required return is a Class 1 misdemeanor under N.C.G.S. § 105-236.⁷

Records to Keep

Hold onto records that support your tax liability for at least three years after filing: copies of every E-595E you’ve issued, invoices for exempt purchases, records of sales tax collected from customers, and your filed returns.⁸ Digital copies are fine as long as the NCDOR can access them during an audit. Three years is the floor; if a tax dispute is open, keep the related records until it’s resolved.

What Happens if You Misuse the Certificate

A resale certificate only covers items you actually intend to resell. Using it to buy office furniture, electronics, supplies, or anything else for personal or internal business use is a misuse, and the penalties stack:

A $250 civil penalty per incident of misusing an exemption certificate.⁷
You owe the tax that should have been collected on the purchase in the first place.²
If the misuse was intentional fraud to evade tax, an additional penalty of 50% of the total tax deficiency.⁷
Willfully attempting to evade sales tax is a Class H felony. Willfully failing to collect or remit sales tax you were required to collect is a Class 1 misdemeanor, prosecutable up to six years after the violation.⁷

The $250 per-incident figure sounds small until an audit covers several years of purchases, at which point it stacks into real money alongside the back tax and interest.

Keeping Your Account Current

Update your information through the same online portal if your business name, address, or ownership structure changes. If you close the business or stop making taxable sales, tell the NCDOR so they close the account. A dormant account still owes returns, and the same misdemeanor exposure for missed filings applies.⁷

1
North Carolina Department of Revenue. Current Sales and Use Tax Rates
2
North Carolina General Assembly. North Carolina Code 105-164.28 – Certificate of Exemption
3
North Carolina Department of Revenue. Sales and Use Tax Registration
4
North Carolina Department of Revenue. Business Registration
5
North Carolina Department of Revenue. Form E-595E, Streamlined Sales and Use Tax Certificate of Exemption
6
North Carolina General Assembly. North Carolina Code 105-164.16 – Returns and Payments
7
North Carolina General Assembly. North Carolina Code 105-236 – Penalties
8
North Carolina Department of Revenue. SUPLR 2013-0003 – Maintaining Purchase Records in Digital Format