What do contractors need to provide for tax exemptions on certain materials?

Contractors need to provide a resale certificate to the supplier for tax exemptions on certain materials because this document formally indicates that the contractor is purchasing materials for resale or for use in contracts, exempting them from sales tax. Resale certificates are a common mechanism used in many states, including Virginia, to streamline the purchasing process for contractors by allowing them to avoid upfront costs associated with sales tax.

Using a resale certificate simplifies transactions and helps contractors manage their cash flow since they don't have to pay taxes on materials that will not be held by them but rather used in a project. By presenting this certificate at the time of purchase, contractors ensure compliance with tax exemption laws that apply to their industry.