In plain English
The logic is that sales tax is collected once, at the final sale. When you buy goods you intend to resell, the tax is deferred to the customer who actually consumes them.
Rules, names and forms differ by state. Some states issue a certificate; some accept a completed exemption form referencing your registration number. Always check your own state's requirements.
Example
A supplier asks for your resale documentation before quoting truckload pricing, and keeps it on file for their own audit records.
Why it matters
Most wholesale suppliers will not open an account without it, and paying sales tax on inventory you resell erodes margin.
COMMON MISTAKEUsing resale documentation for items the business consumes itself, like shop tools or office supplies.