Generally, when a seller makes a sale of tangible personal property to a buyer resident in a state with sales tax, the seller needs to collect sales tax from the buyer and remit it to the state. However, states have an exemption for sales that are not made to the final end-user but rather to a wholesaler or someone who will resell the property. In that case, the buyer does not need to pay sales tax if he provides the seller with a valid reseller certificate.

A reseller certificate is not an official state document but rather it is filled out by the buyer who provides his name, address, state ID number and certification that the goods are being purchased for resale. There is also a multi-state certificate which a buyer can use which is accepted by multiple states. In some states, a letter from the buyer that has all the information contained in the reseller certificate can be a substitute.

The biggest difference is that sales tax is paid by the final customer but VAT is paid at every step of the supply chain. A business that pays VAT gets a credit and can offset VAT paid with VAT collected. Sales tax is usually not creditable. If you are exempt from sales tax, you can give the seller a certificate explaining why (e.g. a reseller certificate).