eCommerce Blog / How to Get a Resellers Tax ID

How to get a Resale License (Sales Tax ID)


By November 28 2017

Hey, would you like to pay tax that you don't actually need to pay?

I'm guessing your answer is a big, fat "Nope." No one does, which is why if you're going to get into the retail business, you need a reseller's permit (also called a resale license, reseller's license, resale certificate or reseller's certificate, sales tax permit or sales tax ID).

If you're a US-based seller, you don't need to pay sales tax out of your own pocket for the products you're reselling to others. Your customers will pay it when they buy the product. You'll collect the money and send it to the state on a routine schedule.

A reseller's license is your flag saying "I sell to others. I can buy wholesale products without paying sales tax because I pass the tax onto my customers." 

How Do I Get a Sales Tax ID/Reseller's License?

Half the trouble with signing up for a sales tax license is finding where to go!


To get started, you need to find your state tax department. For example, someone based in New York would go to the New York State Department of Taxation and Finance (either online, by phone or in person) and fill in the appropriate form.

You'll find that when you've made your way to the right website, most of the information and forms you need are just waiting for you. 

That's why I've got this nifty map to help you find your way faster:

Click on your state to find the right sales tax information for you,
and register for your license.

 

 

 

 
Sales Tax Applies
 
No Sales Tax

 

 

Find this useful? Spread the love: Share it. :)

Once you get your sales tax ID, the state will start sending you monthly/quarterly statements. In some cases, states will use your federal EIN as your sales tax ID. In some cases, they'll issue you a separate number. 

Sales Tax: A Brief Overview

Sales tax is a tax levied on all sales of physical goods to consumers within most states. Some states also charge sales tax for certain kinds of services.

Not all states charge sales tax: if you live in Delaware, Oregon, New Hampshire, Montana or Alaska, then sales tax either does not apply or applies only in certain circumstances. For sellers in any other state: yes, you do need to worry about sales tax!

You can find your state's sales tax rate here. It is important that you do this, because taxes vary significantly among the different states. For instance, some have one rate that applies state-wide, while in others, the rate varies between counties and cities.

Determining what state(s) you need to pay tax comes down to where you operate. A base of operations is called a "nexus." If you are dropshipping from home, you'll only be responsible for that state's sale tax because you only have one nexus. If you have a storage warehouse in another state, you have a nexus there, too. If you opt to ship goods via Fulfilled by Amazon, you technically have a nexus in whatever state(s) your goods are warehoused in.  

Note: In some states you also need to collect sales tax on shipping and handling.

You can learn more about sales tax here

A Bit of Extra Information for You

There are a few other things to consider when looking into the taxes you'll be responsible for as a seller. 

  • Reseller's Permits and Buying Wholesale 

    If you are a US citizen purchasing wholesale goods from a supplier within the US, then you will probably need a resale certificate or license from the state in which your business is located.

    A resale certificate or license enables you to purchase goods wholesale without paying sales tax. It also allows you to collect sales tax from your customers, the end consumer.

    Without a resale certificate, you will have to pay sales tax on the goods you buy wholesale and then also charge sales tax. In this case you can add the sales tax you paid as a deduction on your return, but it is much less complicated to just present your reseller's license when you buy.

    Most wholesalers will ask to see a sales tax ID or reseller's license before they will sell you the goods. This is because they are legally obliged to check whether you are able to collect sales tax from the end user.

  • Use Tax

    Another thing you may come across is something called "use tax." This tax is in place to discourage people from shopping in states with lower taxes than their own.

    Use tax means that if you purchase goods in another state, you owe tax equal to the amount you would normally have paid in your own state. It will also apply to you if you buy goods intended for resale and then end up keeping them for your own use.

    The good news is, if you are based in one state but ship to customers in another, you're not obligated to collect sales tax or deal with use tax at all. Just as you're responsible for paying the use tax if you get your supplies from out of state, your consumers are responsible for the use tax when they buy from you. 

    Obviously you could potentially get away without paying use tax because it works on an honor basis. However, should you be audited, use tax is something auditors like to hone in on. As a result, many new businesses get caught in the cross-hairs. Therefore it is wise to make sure that you pay it and keep the appropriate records.

  • Collecting Sales Tax on eBay or Your Website

    The process for collecting sales tax will differ depending on where you're selling.

    If you're selling on eBay, for example, you can learn how to collect sales tax on eBay here. The process basically looks like this:

    1. Go to "My eBay."
    2. Click the "Preferences" link from the left-hand navigation bar.
    3. Click "Show" in the "Payments from Buyers" section.
    4. In the "Use Sales Tax Table" section click "Edit."
    5. The "Sales Tax Table" page appears.
    6. Find the state you want to start charging sales tax in and put in the correct sales tax amount in the "Sales Tax Rate" field. You can also opt to charge sales tax on shipping and handling, if it's required.

If you're selling on your own online store, or if you're planning to in the future, things can get a little tricky if you're not careful!

The best thing to do in this case is hire an accountant, or use tax software such as Avalara to keep track of the sales tax you need to collect and pay. 

If you create your own online shop with SaleHoo Stores, setting up your sales tax collection is automated and easy.

  • Records to Keep

    You need to keep your resale certificate(s) on file as part of your business records. You must be able to match your sales records with the certificates for audit purposes.

  • Reporting Sales Tax

    How often you need to complete Sales and Use Tax reports will depend on your monthly sales turnover and the state you are working from.

It's very important you are sure to collect the correct amount of sales tax, as you will be held liable for the difference if you come up short.

Note: Trading Assistants do not need to collect or remit sales tax.

Common Questions on Reseller Licenses Answered!

What is Reseller’s Permit/License?

A reseller's permit or license is the documentation you need to avoid paying tax on items that you’re going to resell to customers. The sales tax for an item only needs to be paid once, and it’s paid by the end customer, not you as the seller. A reseller's permit lets your suppliers know that you are licensed to sell the items on, and that they can sell them to you without collecting the sales tax from you. Many suppliers will require a reseller’s license before they will do business with you.

Note that your reseller’s license will only allow you to avoid paying tax on items you successfully resell. If you are buying items for your business that you won’t be reselling, or you don’t end up reselling the items you’ve bought, you will be responsible for the tax on those items. 

Is a seller’s permit/resale license and EIN/Tax ID the same?

These are not the same thing. A seller’s permit/resale license is the same as a state tax ID, as both are issued by the state for sales tax purposes. An EIN or federal tax ID number, however, is issued by the federal government, not the state. The EIN is used to hire employees and manage employee taxes, and it is also used to file business taxes, while state ID numbers are used to file sales taxes. Here is the difference between an EIN and a state tax ID according to the IRS (you can register for an EIN there too).

To break things down a little further, a seller’s permit and a resale license aren’t quite the same thing either. A seller’s permit, sometimes called a "sales tax" permit or license, allows you to collect sales tax from your customers, while a resale license allows you to buy items you’re going to resell without paying tax for those items yourself. Some states prefer one term or the other, and many states combine the documents into a single license or state tax ID. You’ll find the requirements for your state when you register with them. To find the registration for your state, click on your state in the map further up in the post. 

Who will need a reseller’s permit/license?

If you want to buy products to sell, and you don’t want to pay sales tax on those items, you will need a reseller’s permit/license. For example, if you want to buy wholesale products to sell on eBay or your online store, you’ll need a reseller’s permit/license to avoid paying tax on those items. Suppliers will often require you to present one before they’ll do business with you. 

There are some states that don’t have sales tax, including Alaska, Delaware, Montana, New Hampshire, and Oregon. If you live in these states, or conduct business out of them, you might not need a reseller’s permit or license for these states. How this is managed depends on the state; Oregon, for example, issues a resale certificate for presenting to suppliers, while New Hampshire doesn’t issue licenses at all. You can use the map further up in the post to find the information pages for these states to find out whether you need a license.

What is an EIN?

An Employer Identification Number (EIN), sometimes called a Federal Employer Identification Number (FEIN), is like a personal ID number for a business. Businesses use their EIN to pay employees, and to file business tax returns. Some banks require an EIN before they’ll let you set up a bank account for your business. 

If you are a sole proprietor, you may not need to get an EIN, as you may be able to use your Social Security number instead. However, you might consider getting an EIN anyway, as this stops you from having to provide your Social Security number to others, which ultimately protects you from identity theft. You can register for an EIN here

What are Sales Taxes?

Sales tax is pretty much exactly what it sounds like: a tax applied to the sales of goods and services. The sales tax for an item or service is meant to be paid only once, and it’s meant to be paid by the end customer. When you’re buying items to sell on, you’re not the end customer, which means it’s not up to you to pay the sales tax for that item. That’s where your reseller’s license comes in! The license tells suppliers you’re a seller, and that they don’t need to charge you sales tax.

Generally, if you’re selling goods, you will collect the sales tax for those items from your customers when they buy from you. You’ll then pass that sales tax on to the state government. 

What is a Resale Number?

A resale number is the number attached to your reseller’s permit or license. When you get a reseller’s permit or licence from your state government, it will have your resale number. You can then give this number to suppliers to buy goods for resale without paying the sales tax for those items.

What is a Resale Certificate?

A resale certificate is yet another name for a reseller’s license or permit. This means it has the same function: to allow you to buy items for resale without paying the sales tax for those items yourself. 

You’ll present your resale certificate to suppliers to show that you’re certified to buy their stock without paying tax, because you’ll be charging your customers the sales tax for those items.

How to get a wholesaler’s license?

A wholesale license is yet another name for a reseller’s licence. To get a wholesaler’s license, you’ll apply through the preferred application system of the state you live in or conduct business out of. Most states have an online application system to make it faster and easier for you to apply. 

To register for a wholesaler’s license in your state, use the map further up in this post. Simply click on your state to go through to the registration page or info for your state. If you’re not sure about your specific situation, you can try contacting your state’s tax department to ask.

 

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Comments (424)


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Craig Simms on 13:31 15 Dec
Hi Melissa,

Here is my situation, I am Canadian living in Canada. I own a US C-Corp registered in Delaware. The company's mailing address is in NY and the fulfillment company I use is in Michigan. I am looking to add a new US supplier but they require a state resale tax certificate. My question is what state in your opinion would apply, I was under the impression Michigan was my greater presence as actual physical work is being performed there..

Regards and thank you in advance.
Craig
Melissa Johnson on 1:09 21 Dec
Your business is headquartered in Delaware, which is tax exempt: http://revenue.delaware.gov/services/Business_Tax/Exemptions.shtml So you should let the supplier know that and provide the appropriate documents.

If you're paying taxes to the state of Michigan, you should be able to get the required documentation from MI, but if you're not obligated to pay tax there, you shouldn't have to show a resale tax certificate at all.
Rustam uktamov on 0:32 28 Dec
hi there. I have registered as a sole proprietorship in state Virginia. I have FEIN too. The certificate to be filled out from the supplier asks for "certificate registration number". Any idea where can I get that number? My business account with www.business.tax.virginia.gov does not show me such a number. Thanks!
Melissa Johnson on 20:07 31 Dec
It looks like you need form ST-4 -- if you don't have that, you'll need to apply for one:

http://www.tax.virginia.gov/content/sales-tax-certificates
Mohamed Diab on 15:16 31 Dec
So, please if anybody could help i'll be grateful.
I'm not a U.S citizen but i'm Egyptian, and i would like to know if there any possibility for creating a ST ID to be able running my first contacts with suppliers who requested sales tax ID, i'm only a drop shipper / re seller on ebay & amazon and didn't create my own web store yet.
So any help will be appreciated on this please.

Regards
Melissa Johnson on 20:16 31 Dec
Since you're based abroad, the only way to get a sales tax ID would be to incorporate your business in the U.S. and then file the necessary paperwork in the state where you incorporate. I think you'll also need a registered agent. Of course, doing so will obligate you to pay taxes in the U.S., but I'm not sure what the eligibility requirements are for creating a business in the U.S. It's something to discuss with a tax professional -- they can advise you best.

If you tell your suppliers you're based internationally, they may just ask for the equivalent documentation for your home country. Your best bet is just to ask if they work with international clients, because if they do, it'll save you the trouble of having to incorporate.
Roxy on 4:17 4 Jan
Good night, I am living in Jamaica. Would I be able to sign up successfully with Salehoo?
Melissa Johnson on 22:21 8 Jan
Hi, Roxy!

Yes, you should be able to register.
NOREEN DUNN on 18:18 5 Jan
Hi! I'm Reenie from NY. I have a valid business and NY Sales TaxCerificate of Authority. I buy and sell auction items on Ebay. I am going to auctions in Florida soon and would like to know if I can present my NYS certificate for tax exemption. I did this last year, one auction house was good with it. another was not. I have yet to find proper information in regards to the legality. Florida I believe has a 6% sales tax rate and our county here in NY is at 8%.

Thanks in advance for any information!
Reenie
Melissa Johnson on 22:38 8 Jan
Hi, Reenie!

I've done a bit of digging and I haven't actually found an answer to your question. Honestly, it may be something that varies from one auctionhouse to another. If you have any questions, though, you might actually try contacting the Florida Department of Revenue: http://dor.myflorida.com/dor/taxes/gta_contact.html
Frinze Delis on 7:33 11 Jan
Hi Salehoo staff. Suppliers were all asking for resellers tax id and I am based in Canada. As ive read the thread here, I cant find the answers how, even in google. Can you give me a name of member here in salehoo that is based in Canada that does dropshipping? So that I can ask him/her on how he get his business license? Thanks a lot salehoo
Melissa Johnson on 20:05 11 Jan
In most cases, providing proof of your business' registration in Canada will be sufficient.

If you want a US-based reseller's tax ID, you'll first have to incorporate within a US state first, which means filing the paperwork, paying fees, and designating a registered agent.

If you're looking for another member who is also dropshipping from Canada, i think the best way for you to do so is to check out our forum: http://www.salehoo.com/forum/

You can also reach our support team at http://www.salehoo.com/support

Hope this helps!
Michelle Williams on 9:04 12 Jan
I'm trying to figure out if its worth it. I want to sell on Amazon and eBay. Mostly dropshipping but I would like to sell a few items on my online store. I need a resellers license to buy a few items from wholesallers, any suggestions?
Melissa Johnson on 17:21 14 Jan
I suppose it depends on what you're interested in selling! We generally recommend that our members pick a specific niche and stick to it rather than having a general mish-mash of products.

Having your own store is a good counterbalance to selling on Amazon and eBay. the best part is you don't pay the same sort of seller's fees; just whatever payment processing service you use.
Hamid on 1:38 16 Jan
My name is Hamid
i am international businessman from Libya. I am trying to buy shipping container from US, but the require business tax id and business registration. so my question is How Do I Get a Tax ID and business registration ?
Thank you
Melissa Johnson on 17:04 18 Jan
hi, Hamid!

In some cases you can provide proof of your business' registration in your home country as equivalent. However, commerce in the U.S. is regulated by individual states. So you would have to go through the steps to incorporate in the state of your choice (Delaware and Nevada are popular options, though you can choose any state) and file the appropriate paperwork to get the tax ID and any other documentation. You can get assistance with that from an attorney or an accountant, typically -- I would look for someone who has a background in international business. Consulting an expert is just the best way to make sure everything goes smoothly.
Maria Requena on 20:22 24 Jan
Hi I am based in Mexico, what happens if I sell to US customers through my website, but by from US suppliers, do I need to register to have a Tax ID , even though I pay taxes in my country?
Melissa Johnson on 17:54 26 Jan
You'd only need a tax ID if you were to incorporate in the U.S. You should check with suppliers -- many of them will be happy to work with you as long as you provide proof of your registration in Mexico.
Osama on 10:12 25 Jan
Hi,
I am a digital marketing Specialist. Now looking to start my Own E commerce business with the help of drop shippers. My target market is US. Need some guideline how to start my business & do i need to register my company in US & how to get a re-seller certificate as i am a non us citizen.

Thanks
Melissa Johnson on 18:01 26 Jan
Hi, Osama!

Here's a really good, comprehensive starter guide: http://www.salehoo.com/dropship

To register your company in the U.S., you'll have to pick a state and incorporate there, then file the necessary paperwork to get set up to pay taxes, get a reseller's permit, etc. However, you don't necessarily need to do all that -- you can still dropship from abroad. Some U.S. suppliers will be happy to work with you as long as you provide equivalent proof of business.
Parasuram Kappati on 16:00 25 Jan
Hi I have a registered LLC co.in Delaware do I need MI registration to sell products ON LINE from MI,

Shall I need import licence to import steel products from India in to US.
Melissa Johnson on 18:10 26 Jan
Hi there!

I assume you're based in Michigan? I believe that would create a nexus, which might obligate you to pay taxes in Michigan.

Importing any sort of product in bulk will require you to go through customs; however, since steel is generally a raw material it'll be a bit different than retail goods.

Your best bet is to talk to an accountant or other tax expert, plus a customs broker, to figure out the logistics.

Hope that helps!
sal on 4:58 30 Jan
hi am am trying to start and online busniess i and looking on the new york site and can not find a section that says any thing about a resale license would you be able to help.
thank you
-sal
Melissa Johnson on 20:11 3 Feb
Hi, Sal!

I'm not familiar with how New York state tax law works. However, I think this might be a good starting place: https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/how_to_register_for_nys_sales_tax.htm

It appears that most businesses are responsible for issuing their own exemption certificates. However, your best bet is probably to talk to an accountant or other tax expert to be sure.

Hope that helps!
nghia on 6:05 1 Feb
Hi,

If i have a re-seller permit, if i were to buy stuff like at walmart or some other retail store, do i have to pay sales tax on it? If i don't, how does it work with individual retailers if i were to order from them online? I know when i go to a wholesaler, they ask for my verification.
Melissa Johnson on 20:14 3 Feb
You shouldn't have to pay sales tax, no. you'll just have to keep your permit on you to show. Most places won't accept a photograph of it as proof. I don't know how it works online because every store is different, but if you contact site support I bet they can tell you. I know Amazon allows you to set up tax exemption when you buy online.
Meet Patel on 11:25 10 Feb
Hello there,

We are an online marketplace that wish to re-sell products sold via different companies. Our company is incorporated in DE but is operated from abroad. Since DE does not require any certificates to re-sell, we don't have to get a re-sell permit there.

My question is I have a virtual mailbox in CA (virtualpostmail.com) - I am guessing this means I have nexus in that state. Do I have to get a re-seller permit in CA?
Melissa Johnson on 20:42 14 Feb
I don't know that you'll need a reseller permit since it sounds like you're sourcing online. Depends on what your suppliers want to see.

However, you may be liable for taxes in California, at least based on this: http://www.boe.ca.gov/sutax/outofstate.htm I don't know how you use your mailbox.

I suggest talking to an accountant or attorney just to make sure. They can guide you through the process.
Matthew Miner on 17:20 15 Feb
Hi,

I have an EIN and was wondering if there is anything I am missing to cover myself for taxes and sales. I plan to dropship and sell strictly online. I am running my business out of Mass.

Thanks,
Melissa Johnson on 17:29 17 Feb
Hi, Matthew!

Here's a link that may be of some help: http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/salesuse-tax-guide.html

Definitely plan on collecting sales tax for any sales within MA. However, your best bet is to talk to an accountant. They know the tax laws better than anyone.
Toni Patterson on 20:40 16 Feb
I am trying to get my wholesale license or seller's license in ga. Now once i get my license can i go to new york to buy items with my ga wholesale license or sellers license?
Melissa Johnson on 17:30 17 Feb
You should be able to, yes, but you might want to check with the individual suppliers.
adriana on 23:28 22 Feb
Hi. I'm from mexico and would start selling products from a Facebook page . I wonder who would have to pay tax on my country and us . if you only sell for facebook and not on a website , they would pay taxes ?
Melissa Johnson on 4:47 24 Feb
Hi, Adriana!

Sadly, there are too many variables in your question for me to tell you what to do. Are you selling arts and crafts? Dropshipping? Where are your buyers coming from?

Generally, no matter where you're selling, if you make enough that it can be considered a "business" (In the U.S., the threshold is about $600 annually), you're going to have to pay taxes. If you're based in Mexico, that's where you'll pay taxes unless you actually incorporate and establish a presence in the U.S.

An accountant is the best person to advise you. They'll know the ins and outs of what to do.

Hope that helps a little, at least!
Amos Ahchong on 11:45 7 Apr
HI I got a bit confused with all the tax info, I just wanted to clarify, so if I sell on say Ebay do I have to have a sales tax id? As I wanted to start small just things from home. Your advice will be much appreciated as I really want to do things right and branch out as I have been selling just on trademe and bidbud.

Thank you
Melissa Johnson on 16:19 18 Apr
Hi, Amos!

If you're not based in the US (no premises, no nexus, no incorporation) you're not obligated to get a sales tax ID. Instead, you're subject to the laws of your country, which will obviously vary.

In the US, you can make somewhere around $600 in income and have it be considered "hobby" income. You don't have to report it and it's not considered a business. I don't know if the same applies to New Zealand -- I would check with an accountant. They're the best qualified to give you advice on the matter.

Hope that helps somewhat!
Amos Ahchong on 12:29 16 Apr
Hi Do we in New Zealand have to pay this set up and ID.

Thank you
Manuela Marie Basilio on 22:25 16 May
Hi!

I am based in New York but not a US resident. I am on an O1 visa and would like to start doing dropshipping as an extra source of income. I am wondering if I can apply for a sales tax ID or if I am even allowed to do this business. Thank you!
Melissa Johnson on 15:31 25 May
Hi, Manuela!

Honestly, I don't know. I am not an expert in immigration law. It looks like with an O1 visa you may be able to, but you're best off contacting a lawyer or an accountant to verify, especially because commerce is generally regulated by the state, not the federal government. I know that under about $600 is considered "hobby" income and generally doesn't need to be reported, but it sounds like you're looking for a bit more than that.
Robin B on 13:57 20 May
I have a question. I am planning to start selling on ebay. These will be hand made items that I will be purchasing and reselling. I have never seen anyone collect tax on ebay (certainly I've never paid any). How does that work exactly?
Melissa Johnson on 13:57 20 May
Hi, Robin!

eBay is a very different creature than Amazon, since most eBay sellers are independents and eBay doesn't sell directly or offer warehousing services for sellers. Sales tax law varies according to what state you are based in, further complicating the matter.

You can enable sales tax on eBay (see here: http://pages.ebay.com/help/pay/checkout-tax-table.html#charge )

However, you may not need to, depending on your state's individual laws. (Generally when you're selling to people in another state you don't have to charge sales tax.) It's also possible that some sellers just build the cost of sales tax into the price of the item.

I would talk to an accountant about the matter and figure out what you need to do.
yalloak on 0:34 24 Jun
Hi Gina, I am based in Australia but wish to only list products on the US eBay platform for sale to US residents. What is the situation regarding Tax and/or any licencing requirements to become a reseller?
Melissa Johnson on 21:46 24 Jun
If you're outside the US, you don't need to worry about paying tax in the US unless you choose to incorporate there (doesn't sound like that's what you're interested in). Otherwise, all you have to worry about is meeting eBay's requirements and Australia's tax laws. Specific dropshipping companies might want to see proof of business, but that isn't true of all companies. I would check with an accountant about what you need tax-wise in Australia.

Good luck!
Hector Ariel Febles Benitez on 22:14 24 Jun
Hi Gina, Im from Dominican Republic, butt plan to sell good in the USA What do I need to do Tax wise??
Melissa Johnson on 17:50 8 Aug
Hi, Hector!

Unless you incorporate in a US state or establish a base of operations in the US, you aren't obligated to deal with taxes here, just your home country.

Hope that helps!
daniel popa on 11:15 20 Aug
not that i am an expert in taxation ....but this sounds wrong....if one sells a product on usa ebay to an usa citizen in the state of say california....then should not the seller charge tax and pass it to the gov of california since the transaction is within usa and the buyer is based in california???
Melissa Johnson on 17:01 22 Aug
eCommerce falls into a bit of a nebulous area just by virtue of being a global thing. It depends entirely on the seller's location.

If you have a base of operations in the US (a "nexus," technically), you're liable for taxes in the state where your nexus is located. But if you're based abroad and have no physical presence in the US (such as dropshipping from a foreign country), you're not. However, any goods you ship from a foreign country into the US might be subject to customs duties, which are the responsibility of the buyer. If they don't pay, the item is sent back.

http://blog.taxjar.com/international-sellers-deal-sales-tax-u-s/
Travis Brian Olson on 5:45 27 Aug
Hi Melissa quick question :).

What exactly are all the things I will need to register for If I want to drop ship on amazon and ebay?

I could not find a solid answer on this . I live in Marietta Georgia of the United States.

Do I need a re seller permit and a business license? or only a reseller permit? Is there a difference between a sellers permit and a resellers permit? Also do I need an LLC? what about DBA?

I'm so confused on this and not sure exactly what I need to register for to drop shipping online. Can you help clear this up?
Also do you have a site you recommend to register through the internet to get registered quickly without the hassle?
Melissa Johnson on 5:12 31 Aug
Hi, Travis!

First of all: I'm not an accountant or a lawyer. I can give you some information, but if you want to be 100% sure you're compliant with state law, I highly recommend talking to an accountant.

When you start your business, by default you are considered a sole proprietorship. If you choose to incorporate as an LLC, you get additional legal protection for you and your business, but you'll have to file your taxes differently and pay to register. You don't /have/ to become an LLC right away, but as you start making more money, it could be worthwhile.

Here's what I've learned: Sellers permits, resellers permits, etc., tend to go by many names and sometimes the terminology gets confusing because there's not a lot of consistency. Basically, you need to tell the state that you are a business and get a permit to collect sales tax. The technical name for this permit, in George, is the "Sales and Use Tax Certificate of Registration." Depending on where you're getting supply from, you may also want to get a certificate that you can show to other retailers/suppliers to show that you are exempt from playing sales tax on those purchases. Some suppliers require it.

To apply for your Sales and Use Tax certifiicate, here's a resource: https://dor.georgia.gov/registration

You may also need to register with your city or county for business license, per this: https://georgia.gov/popular-topic/applying-business-license I don't know how that applies to eCommerce businesses. It's a good question to ask an accountant. =)

A DBA is just "doing business as." I honestly don't know if you'll need one. Here is a bit more info though: https://www.legalzoom.com/articles/file-a-dba-in-georgia

I hope this helps!
Manish Patel on 11:31 18 Sep
I am in India and going to use drop ship facility of a company in New York State,

so as non citizen of USA how can i have resale certificate?
is it compulsory to have resale certificate?

please guide me
Thank you
Manish
Melissa Johnson on 20:08 19 Sep
Hi, Manish!

You shouldn't need a resale certificate unless you do something that would create a nexus -- incorporating, importing to the US, etc. If you are just dropshipping, that shouldn't be required.

However, I am not familiar at all with India's laws regarding eCommerce and taxes for businesses. Even if you're not responsible for collecting tax in the US, you are still responsible for making sure you're covered in your home country.

You'll also want to find out what documentation your supplier might require.

Hope this helps!
Rex on 15:11 30 Sep
Hi Melissa,

So from what I understand the point of a resale certificate is to not have to pay sales tax on items that you mean to resell. However, what happens if you buy something using your sales tax ID and don't pay sales tax, but then don't resell it? What happens if you don't sell anything the entire year?

Also, are there any fees that may result from getting a Resale certificate?

Thanks,
Rex
Alejandro Almaguer Cardenas on 22:42 10 Jan
if im in mexico, will i need a reseller licence?
Franklin Cerrato on 3:25 19 Jan
I don't live in the United States. How can I go about this?
It seems most of the wholesalers, at least the trustworthy ones, need this number to do business. Plus I'm new to this so I really didn't even think I needed a "business identification Number" so, is there a solution for international sellers?
(I don't even have my own online store)
Justin Golschneider on 15:33 1 Feb
Hi Franklin! If you don't live in the U.S., you'll want whatever sales tax ID your country uses. For example, if you live in the E.U., you'd want a VAT number.
Diva Mangal on 19:46 22 Feb
Hello Melissa, I just signed up, and I am located in Alberta Canada, if I wanted to do dropshipping, am I required a Tax ID here in Canada? I am a little bit confused, do you mind explaining? thanks
Devin Corbett on 16:58 16 May
Same Question.

Applications to work with drop-shippers require that I fill out the feild for re-seller certificate, as a Canadian citizen I don't have a reseller certificate. How do I get one, or what can I put it its place? Without something in that section I can't submit applications / be considered by companies / etc.
Justin Golschneider on 12:11 18 May
Hi Devin and Diva! I would register for GST/HST if it applies to your location: http://www.cra-arc.gc.ca/gsthst/

That ought to do the trick. You can also contact our support team to look into this further--maybe we could even get a new article written about it. :-)
onetalldwarf on 0:44 1 Aug
I live in Australia and want to deal with suppliers/dropshippers/wholesalers within the US to sell on Amazon and eBay etc.
I have applied to several US suppliers and some I've not had a reply...
it's most likely because I don't have the required licence?

What will I need to do from Australia (in my case) regarding a resellers certificate?
Please help.
Justin Golschneider on 18:04 1 Aug
Hello! It's more likely that they wanted to see an EIN if you don't have one yet. But, here's a helpful article on registering for sales tax when selling from another country: http://www.salestaxsupport.com/blogs/industry/us-sales-tax-for-foreign-sellers/international-sellers-and-u-s-sales-tax-registration/
Linda L. Hodge on 4:16 8 Aug
I reside in Southern California. Currently there is a crazy trend that has the women 30 years to 50 years of age running from store to store to find a specific pottery piece by a specific upcoming artist. I want to purchase these pieces in bulk and resell these charming pieces across the United States.
I don't have a resale license, certificate, or the other. I'm just getting started but need to get moving because time is money.
Any thoughts?
Thank you,

Linda
Justin Golschneider on 13:47 8 Aug
Hi Linda! Generally, the fastest option is to go to your local town hall and ask what you'll need. They should be able to set you up with everything necessary to purchase wholesale and sell from your house or locally operated business, including licenses and information on any state and local taxes that may apply.
Mark C. on 2:48 23 Aug
Hi, I live in the state of Georgia and I'm interested in becoming a wholesale distributor. My customer base would be overseas and the sales would be conducted over the phone and via email. The majority of them have freight forwarders that I'd send the products to or they'd pick up from me, and then in turn ship to my customer. What if any licenses would I need to apply for? Any help would be greatly appreciated.
Justin Golschneider on 14:07 23 Aug
Hi Mark! I would start with a Georgia sales tax permit: https://blog.taxjar.com/register-sales-tax-permit-georgia/

You will need this to prove to your suppliers that you are reselling the goods and not just trying to buy in bulk while dodging sales tax. You will also need it to charge sales tax to any consumers you sell directly to in Georgia, though you won't need to charge any licensed retailers.

I'd ask if you need anything else at your local town hall. Happy selling!
Nafis on 8:06 27 Aug
Hello
I live in Bangladesh. And I want to drop ship from China to USA. So do I need to pay any sale tax..? Please answer.. It will help me a lot.
Thank you
Justin Golschneider on 17:26 28 Aug
Hi Nafis! If neither you nor your suppliers have any offices or warehouses in the U.S., my understanding is that you would not need to charge or pay U.S. sales tax. You'd only have to deal with customs.
Arifah radhiah on 22:47 4 Sep
Hi, I am not a USA citizen and already got my EIN number. However my supplier ask for a copy of my resale certificate if I want to buy from them. What should I do as I only have the EIN number.
Justin Golschneider on 12:59 5 Sep
Hi Arifah! If you do not have any business locations or sales tax nexuses (like those created by using Amazon FBA) in the U.S. and otherwise do not have to pay sales tax, then I would explain the situation to them—sales tax should apply neither to your sales nor to their sales to you, so a certificate is not needed.

However, if you have to collect and remit sales tax in any state, then you should register for a reseller's certificate before moving forward with supplier negotiations.
Chau Nguyen on 23:26 10 Sep
Hi Gina,

I live in Montana and there's no sales tax here. I was told by the MT Department of Revenue that MT doesn't have a resale certificate. How do I purchase my supply at wholesale price without this certificate? I'm a jewelry designer and maker. Thanks for your help!
Justin Golschneider on 16:17 11 Sep
Hi Chau! If you plan on selling directly from your home and/or other Montana locations, then simply tell them that a reseller certificate is not applicable to you because there is no sales tax in Montana. However, if you're planning on selling through FBA or have locations in other states, then you will need sales tax IDs for all applicable states. In that case, you can sign up for those first so you have something to show.
Rosa Gonzales on 0:32 17 Sep
Hi, I am thinking of starting my own online business, I dont know how may licenses , permits, reseller permits or what ever else is needed. Can I get some help please? I just need to know I have all my ducks in order. Thanks Rosa G
Justin Golschneider on 20:37 19 Sep
Hi Rosa! If you get started without using Amazon FBA and only selling from your own home, you generally only need a sales tax ID / reseller certificate for your state, and possibly your city. Your town hall can provide all the necessary paperwork.
Elias on 10:00 22 Sep
Hi
what if i buy from a US supplier with no Tax then export to another country ?

Elias
Justin Golschneider on 14:37 22 Sep
Hi Elias! To the best of my knowledge, a resale certificate / sales tax ID only applies to domestic sales. It won't be applicable to you if you only sell to customers outside the U.S.
company registration on 11:09 29 Sep
good and service tax is very vast. And detailed information provided by you is very helpful for me.






Tahnesha on 7:41 2 Oct
I have an Australian ABN can I still apply to companies that require a sales ID, Im guessing yes but not sure.. thanks...?
Richelle Monfort on 3:46 4 Oct
Hello Tahnesha,

Yes, you can :) You can use your Australian ABN when asked for a sales tax ID as it is the equivalent of it. Hope this helps!
Tremayne Moody on 16:59 8 Oct
I'm mostly looking for clothing vendors so that I may purchase and resale.
Richelle Monfort on 10:47 24 Oct 2017
Hello Tremayne,

Yes we do have suppliers of these. You can check out products/brands we have using this demo if you wish: https://www.salehoo.com/find-a-supplier (you need to join for full details obviously).

Once you join you can instantly access and contact them within our directory. You can join here when ready: https://www.salehoo.com/join-now It's $67 USD for one year which gives you unlimited use of SaleHoo.

Feel free to let me know if you have any further concerns, I am happy to help!

Have a great day :)
on 15:11 11 Oct
I operate a business in Connecticut that sells strictly online. I have a Sales and Use Tax Permit that allows me to buy tax exempt goods for resale. So far I have only purchased goods from Connecticut for resale. What would I need to do in order to purchase good from New York for resale on my online store in Connecticut? Can I use the same Permit? Should they accept it or do I need to get something from NY State?
Richelle Monfort on 11:53 24 Oct 2017
Hello Steve,

You might find this article helpful - https://www.tax.ny.gov/pdf/memos/sales/m88_12s.pdf All the best!
Richard on 17:21 13 Oct
I live in WA state, and I am considering starting an online-only dropshipping business, which by definition would have both clients and wholesaler/suppliers from around the country as well as around the world. I have thought of doing it through eBay, through Amazon, and through my own web-based store (i.e. Shopify) with ads on social media (i.e. Facebook, Instagram, etc). None of the "how to get started" sites I've come across so far have mentioned anything about taxes or business licenses. I just randomly stumbled across this site, so I have a couple of questions. 1: Is there a certain point where if you make less than that amount each month (or each year) you do not need to file taxes or have a business license? Or are they all breaking the law, or more specifically teaching others to do so? 2: Can you get away with incorporating the sales tax into the price and not mentioning sales tax at all? For example (I will simplify the math): I have an item I want to sell for $10, and tax would be 10% or $1. Can I just sell it at $11 without mentioning sales tax, and pay the sales tax out of my own income at the end, without any issues? 3: Can I do the same with Shipping & Handling? Basically, I sell the item as $12, say it is tax free and that shipping is free, and then pay the $1 or $2 fees later when I file? 4: Is it possible to get started with the dropshipping business, keeping detailed records, and then only after sales pick up THEN get the reseller's license and/or business license (this would still be before it's time to file taxes for the time during which I got started).
Richelle Monfort on 11:56 24 Oct 2017
Hello Richard,

To ensure that you get the correct answers to your questions as they are very specific and involve computation, I strongly suggest you visit your local county clerk's office or consult an account to explain these to you in detail. Hope this helps a bit :)
loic leroi on 10:16 24 Oct 2017
Hi,

I live in Australia and want to use US drop shippers to sale to US customers. I have a EIN, an amazon account. But I'm still trying to get my head around the sales tax and resellers certificate.. Im not sure how to proceed with those.
Richelle Monfort on 11:08 24 Oct 2017
Hello loic,

Since you are based in Australia, this guide should help https://www.salehoo.com/education/business-setup/registering-a-business-in-australia Cheers :)
Anna Drozhinski on 7:45 14 Nov 2017
Hi
My name is Anna & i live in Israel.
which documents would i need for my drop shipping business?

tnx
Anna

Rakesh Mistry on 14:36 15 Nov 2017
Hi Mellisa,
I am US citizen based Texas. I have applied for my LLC based in texas and also planning to get my Tax ID soon. I am planning to launch my e-commerce dropshipping website home based. My question is.
1. My dropshiipers are located in china and they will send order direclty to usa via epacket delivery. Once customer placed an order on my website i will let my dropshipper know and they will send order to customer directly. what will be tax implication on this. should i charge my customer sales tax?
2. I also dont pay any taxes when i purchase something from dropshipper. as they dont require my tax id. or chinese supplier dont care whether u have tax id or not.
2. Do i need any other licences to conduct business?
3. are sales Tax ID and reseller permit same/?
4. What if I have no income.


Richelle Monfort on 6:39 17 Nov 2017
Hello Rakesh,

The best for you to do is check with your county's Tax office so you can apply the correct tax charges to your customers. It's not always required to get started with most suppliers but there are quite a few benefits in obtaining one. I'd recommend you check out the post below to give you a full understanding:

https://www.salehoo.com/blog/why-suppliers-ask-for-documents
Richard Vale on 23:19 18 Nov 2017
Hi guys,

I'm from Canada
I have an Oregon US address
I plan to sell in Amazon.com (US)
I need EIN and Reseller cert

What about Sales Tax implications based on my above background? I know Oregon doesn't collect Sales Tax. Do I need? Any info/advice are much appreciated. Thanks!
Richelle Monfort on 4:30 20 Nov 2017
Hello Richard,

Although you will be selling in Oregon, it might be best if you check with your tax office in Canada to be sure since you are currently based there. All the best!
Youwillsurvive.org on 0:49 6 Dec 2017
'If you're a US-based seller, you don't need to pay sales tax out of your own pocket for the products you're reselling to others. Your customers will pay it when they buy the product. You'll collect the money and send it to the state on a routine schedule.

A reseller's license is your flag saying "I sell to others. I can buy wholesale products without paying sales tax because I pass the tax onto my customers."

I couldn't get a tax attorney or several other people to have put it this plainly.

TELL ME WHAT IT IS, WHAT IT DOES AND DO I NEED IT. No ONE except this article said this!!!!

Thank you!
Richelle Monfort on 6:09 16 Jan 2018
Hi there,

Having sales tax nexus in one or more states means that state requires you to register for a sales tax permit with the tax department for that state (generally called the State’s “Department of Revenue”). Once you receive your sales tax permit, you’ll need to collect sales taxes on from all of your customers in those states when taxable sales are made. You will also be required to remit and file these "collected taxes from your customers"

You can read more about online selling tax concerns here: https://www.taxjar.com/guides/intro-to-sales-tax

Hope this helps!
Aaron Warren on 2:36 6 Dec 2017
Hello,
My name is Aaron Warren, i have been researching about starting an online drop shipping store on shopify, i live in canada but will be selling to usa. The one thing that i would like some help with would be taxes, as in i am a Canadian so im guessing i would pay my income tax two Canada. but do i need to pay sale tax to usa? and would i just need two apply for a ENI and a Business Number
Richelle Monfort on 6:02 16 Jan 2018
Hello Aaron,

Since I'm not tax expert myself, I think you will find this article helpful in getting your questions answered - https://sellics.com/u-s-sales-tax-explained-for-both-u-s-and-non-u-s-sellers

All the best!
Kingsley Egeke on 16:50 15 Jan 2018
l really appreciate your point on this resallers tax, what of those of us who are not US resident and we do sell on ebay, amazon and other how do we register or get tax ID?
Richelle Monfort on 6:05 16 Jan 2018
Hello Kingsley,

If you live outside the U.S. and have no sales tax nexus in the U.S. – In this case you won’t have to worry about registering for a sales tax permit and collecting taxes. You might still make sales to customers in the U.S., but if you do not have sales tax nexus in any U.S. states then you do not have to collect U.S. sales tax.
You can read more about tax nexus here https://sellics.com/u-s-sales-tax-explained-for-both-u-s-and-non-u-s-sellers

Also, might be best if you refer your concerns to an account.

Hope this helps!

Ciggu on 13:45 17 Jan 2018
Hi, I am based in Illinois and I sell ecig online. My understanding is that IL doesn't require license just to sell ecig but the usa wholesalers want me to present retailer license. What kind of license do I need since I guess there is no license requirement to sell ecig? And do I need to collect tax from customer? I sell only ecig.
Richelle Monfort on 8:15 18 Jan 2018
Hello Ciggu,

You will have to check with your local country clerk if you need specific permits or documentations to sell ecigarettes.

All the best!

 

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