Get a Resale Number

Revision as of 12:36, 18 June 2016 by Kipkis (Kipkis | contribs) (importing article from wikihow)

(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)

You should have a reseller's permit, also known as a resale number, reseller's license, or sales tax identification number, if you have a business through which you are purchasing products for resale. This permit allows you to collect and remit sales tax to your state Department of Revenue. A resale number will also allow you to purchase items from wholesalers and distributors without paying sales tax.

Steps

Applying For a Resale Number

  1. Determine if you need a resale permit. If you are selling goods, you'll need to collect sales tax on those goods in most states. Even if your state does not charge sales tax (for example, Oregon or Montana) it will have a Business License that functions in a similar manner to sales tax. As a seller, you'll be responsible for paying sales tax on each transaction regardless of whether or not you pass along this cost to the consumer.[1]
    • If you sell goods over the internet, such as through eBay or Amazon, to a buyer within your same state, you'll be responsible for collecting sales tax. If you live in Arizona, for instance, and sell to another resident of Arizona, you'll be responsible for paying sales tax on that item.
    • If you sell less than $4,000,000 in annual sales, you are exempt from paying sales tax to buyers who live in other states. For example, if you live in Virginia, and sell to a buyer in Florida, you are exempt from collecting (and paying) sales tax on that transaction.
  2. Find out how to apply in your state. Different states handle the application for resale numbers through different departments. In California, for example, you'll need to apply through the California State Board of Equalization. In New Jersey, you'll need to apply through the Department of the Treasury.[2]
    • An internet search for resale numbers in your state should provide you with the specific office to whom your application will be made.
    • Most states have provisions for applying online as well as in person.
  3. Collect the necessary documents for application. If you have a business partner, your partner will also need to be willing and ready to provide information as required for the application procedure. You'll be asked to provide personal identification (social security number, date of birth, drivers license or state-issued identification number) as well as information about your business, such as your bank account information, names and locations of your suppliers, and average anticipated monthly sales figures.[3]
    • If your business is a corporation or an LLC, you'll need to provide incorporation date, corporate number, and FEIN number.
    • You'll need to provide information regarding the structure of your business, its ownership (sole proprietor, general partnership, LLC, nonprofit, etc.)
    • Personal references may be required, and additional information may be requested.
    • These requirements vary from state to state. The above information should be used as a guideline for preparation.
  4. Pay any required fee. Most states charge a nominal fee for a resale number, if they charge a fee at all. If there is a set fee for the resale number application, you should pay it to the state department in charge of issuing resale numbers. For example, in the state of South Carolina, you will need to pay $50 to the South Carolina Department of Revenue.[4]
    • If you register online or in-person, you'll receive your resale number right away.
    • If you register through the mail, it may be several weeks before your tax number is issued. However, you are free to start doing business right away. As long as you've applied for your resale number, you can start to charge sales tax.

Learning More About Resale Numbers

  1. Know the benefits of getting a resale number. If you have a resale number, you won't be required to pay sales tax on items purchased for the purpose of resale. For instance, if you purchase a new desk, you'll have to pay sales tax on it. But if you buy a warehouse full of desks for the purposes of resale, you won't have to pay sales tax if you provide your resale number.[5]
    • Many wholesale and distribution companies will require a copy of your reseller's license or your Sales Tax ID number to make sure you are a legitimate business that will be reselling the products you purchase.
    • Most states also require you to provide your resale number in order to open a commercial checking account.
  2. Consider how many locations your business has. If your business operates in more than one location, you must request and display a resale number for each location. In some cases, it may be possible to file for consolidated permit for multiple business locations.[6]
    • Your sales tax permit is effective until it is canceled by the retailer or revoked by the Department.
    • You may be able to file for a consolidated tax return if you have 2 or more individual sales permits.[7]
  3. Request a replacement resale number if yours is lost. If your resale certificate is ever lost, damaged, or destroyed, you may request a replacement copy. Providing your business name, original sales tax number, your name, your 10-digit phone number, and your email address with your request will speed up your results.[8]
    • You'll need to contact the same department from which you originally applied for a resale number. For example, if your resale number was issued through the state Department of Revenue, contact this office for a replacement copy.
    • You can make sales and collect sales tax as long as your request has been issued. You don't have to wait until your physical copy of your certificate is restored.
  4. Keep current status updated with the state. If you make any substantial changes in your business, you'll need to update your information on your resale number certificate. For example, if you are in a partnership and you add or drop a partner, you'll need to make sure the state is aware of the change in your legal status. If you change your business address or your legal address, you'll need to update this information on your resale number application.[9]
    • If you decide to dissolve the business, you'll need to let the state know that you're no longer in operation.
    • If you sell your business or purchase another business, you'll need to let the state know of these changes.

Tips

  • Generally, you should collect sales tax on goods sold or shipped within your state. You are not required to collect sales tax from customers outside of your state.
  • You will be required to pay sales tax to your state Department of Revenue on a monthly or quarterly basis, depending on your sales volume.

Warnings

  • You are required to pay use tax to your state if you use any of the products that you purchase for resale.
  • If you engage in resale without a resale number, you may be subject to fines. These fines vary by state.

Sources and Citations

  1. ↑ http://www.skipmcgrath.com/articles/salestax.shtml
  2. ↑ http://www.skipmcgrath.com/articles/salestax.shtml
  3. ↑ https://www.boe.ca.gov/sutax/faqseller.htm#4
  4. ↑ http://blog.taxjar.com/register-sales-tax-permit-in-south-carolina/
  5. ↑ http://www.skipmcgrath.com/articles/salestax.shtml
  6. ↑ https://www.boe.ca.gov/sutax/faqseller.htm#7
  7. ↑ https://tax.iowa.gov/iowa-sales-and-use-tax-guide
  8. ↑ https://tax.iowa.gov/iowa-sales-and-use-tax-guide
  9. ↑ https://www.boe.ca.gov/sutax/faqseller.htm#4
Retrieved from "https://kipkis.com/index.php?title=Get_a_Resale_Number&oldid=28585"