How to Add a Sales Tax Exemption to Your Amazon Account

By Greg Purdy · Updated August 2026

An Amazon sales tax exemption lets you buy inventory on Amazon without paying sales tax at checkout. If you buy on Amazon to resell, that tax comes out of your margin on every order, and on a flip clearing 15 percent, 8 percent of sales tax eats half the profit.

Setting the exemption up takes about fifteen minutes. Most guides stop there. What they leave out is how the exemption behaves once it is active: which purchases it covers, what to do when it does not apply, and what records you need to keep so the savings hold up later.

The Amazon Tax Exemption Program applies your tax-exempt status to qualifying purchases from Amazon.com, its affiliates, and participating independent third-party sellers, according to Amazon’s ATEP enrollment page. For resellers, the relevant exemption type is RESALE, one of nineteen buyer exemption codes Amazon supports.

Once it is active, it works automatically. When a participating buyer purchases from a participating seller and the buyer holds an active exemption for the order’s destination, the exemption applies to every item in the order with no action at checkout, per Amazon Seller Central. You can also remove the exemption from individual items during checkout if something in the cart does not qualify.

Both sides have to be in the program. Amazon states it plainly: “A buyer and seller must both participate for a buyer to use their exemption on your offer.”

When you do land on a non-participating offer, you have two options. Before you buy, you can filter your search results to include or exclude seller offers that accept exemptions, a feature almost nobody uses. After you buy, you can request a tax refund from the seller directly.

What you cannot do is fix it retroactively. Both parties have to be enrolled at the time of the order, and enrolling later only helps future purchases. Get set up before your next sourcing run.

The most common reason an application stalls is the wrong document.

Amazon does not accept sales tax permits and does not accept W-9s, per Amazon Business. Those are the two forms sellers usually have handy, and neither one is an exemption certificate.

Whatever you submit has to be signed, dated, and list a description of the items covered, and the business name or address on it has to match the name or address on your Amazon account. Amazon is required to capture valid state tax IDs on the document, and missing IDs can get your application denied or get you removed from the program later, according to Amazon’s certificate requirements page.

Have four things ready:

• The states or U.S. territories you are enrolling in
• Your type of organization
• Your organization’s address
• Your exemption number, or the exemption form itself

Do not put your resale exemption on the account you buy groceries and household goods with.

Prime’s terms prohibit members from purchasing products for resale, for rental, or for shipping to customers using Prime benefits, per the Amazon Prime Terms and Conditions. Choosing the slow shipping option does not get you around it, since that is still a Prime benefit. If you source on Amazon, use a separate non-Prime buying account. You still get free standard shipping on qualifying orders, though the non-Prime threshold is now $35 rather than the $25 figure older guides still quote, as MarketWatch reported.

Amazon itself recommends creating an Amazon Business account before setting up an exemption if you are ordering for an organization. It is free, it is not required, and the exemption tooling and reporting are better there.

The second reason to keep accounts separate is recordkeeping. An account that only ever buys inventory is one you can hand to an auditor without explanation.

There are two entry points depending on your account type.

Amazon Business account: open the account menu at the top right, select Business Settings, scroll to Tax Exemptions & Licenses, then Manage Exemptions, then Add Tax Exemption, per the Amazon Business ATEP walkthrough.

Standard account: go to Your Account, then Other Programs, then Amazon Tax Exemption Program. If a guide tells you to look under Settings, that menu has moved.

Amazon then asks how you want to add the exemption:

Amazon gives you two ways to add an exemption. The quick wizard activates in about 15 minutes; a manual document upload is reviewed within 24 hours.

The wizard asks you to select your state, choose your exemption type (select Resale unless you hold a different one), confirm the correct form for that state, enter your organization details, review, and sign electronically.

You enroll state by state. For most states Amazon generates the certificate inside the wizard. Some states and U.S. territories only issue exemptions through their own taxing authority, and for those you upload the certificate the state gave you.

One detail to watch: if you list Amazon or one of its subsidiaries as the seller of record on your certificate, Amazon can only exempt you from those specific sellers. A certificate written that narrowly will not cover third-party purchases even when the seller participates.

Enroll in every state you actually take delivery in. If you ship to a prep center in one state and your office in another, you need both.

Amazon does not support partial exemptions for enrollment. If you hold one, you have to email tax-exempt@amazon.com with documentation to request a refund, separately for every qualifying purchase. At arbitrage volume that is not a workable routine. Treat it as an exception, not a process.

Amazon can generate transaction-specific exemption certificates on demand. Go to the ATEP landing page, select Order Exemption Library, and pull certificates by Order ID, Digital Order ID, Distributor Return ID, or date range.

This only works if you enrolled through the wizard. Amazon states that transaction-specific certificates are only possible for customers who used the wizard rather than uploading their own exemption certificate. Sellers who took the upload route and want per-order documentation should re-enroll through the wizard.

Pull a date-range report every quarter and file it with your books. Five minutes of work now saves you reconstructing two years of purchase history under an audit deadline.

A resale certificate certifies that every item bought under it is purchased solely for resale, per the ATEP terms and conditions. Amazon puts the responsibility on you: buyers are responsible for providing valid exemption information and using the exemption appropriately, and Amazon does not validate what you submit with any tax authority.

States take it seriously. California treats knowingly giving a resale certificate for property you intend to use rather than resell as a misdemeanor. The purchaser owes the tax that would have been due plus a penalty of 10 percent of the tax or $500, whichever is greater, for each purchase made for personal gain or to evade tax. Failing to report and pay use tax on that property can add a 10 percent negligence penalty or a 25 percent fraud penalty on top, under California Department of Tax and Fee Administration regulations. Other states run comparable regimes.

The exemption above covers Amazon purchases. If most of your sourcing happens on other retail sites, there is a different approach that gets to the same place.

Sales tax follows the delivery address on the order, not where you live or where the product eventually ships from Amazon. Five states levy no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon, per the Tax Foundation. Route your purchases to a prep center in one of those states and there is no tax charged at checkout to exempt yourself from, at any retailer.

Most online arbitrage sellers already pay for prep and labeling somewhere. Choosing a facility in a no-tax state costs nothing extra and removes sales tax from the entire sourcing operation. Our tax-free FBA prep services page covers how the routing works and which facilities operate in those states. Plenty of sellers run both approaches at once.

The reason this question comes up is that buying on Amazon to sell on Amazon is a real model. Amazon’s own pricing moves constantly through lightning deals, coupon stacks, subscribe-and-save discounts, and clearance, while the price the item settles at over time is comparatively stable. The gap between the two is the flip.

It is operationally light. No supplier relationships to build, no minimum order quantities, no capital tied up waiting on a wholesale account. The tradeoff is thin margins, which is why sales tax matters so much here compared to models with more room in them.

The constraint is deal flow. Our Amazon online arbitrage leads lists roundup covers the sourcing services that surface these deals, including several running dedicated Amazon-to-Amazon flip groups, along with the discount codes we have secured for readers.

• Enroll through the wizard so you keep access to per-order certificates.
• Use a non-Prime buying account or a free Amazon Business account.
• Enroll in every state you take delivery in.
• Check that tax is actually coming off your invoices.
• Pull your Order Exemption Library report quarterly.
• Keep personal purchases off the account entirely.