Resale Number Vs. Tax ID

by Ann Deiterich - Updated September 26, 2017
Businesswoman

Running your own business requires the correct documentation. Don’t be fooled into thinking that because you’ve gotten one license, you’re set. Different tax numbers serve different purposes.

Resale Number

Your resale license (and corresponding number) is issued by your state or local municipality. As the name implies, it entitles you to purchase products at wholesale prices and re-sell them. Wholesale purchasing is not for personal use.

Taxation

Your state or local government issues resale licenses to ensure that you are authorized to collect sales tax on taxable products. Moreover, it is used to track your payments of sales tax to the proper tax body.

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Exemption

Your resale license also provides sales tax exemption on your wholesale purchases. The license proves to a wholesaler that you’re using their goods and products in the manufacture of your final product, and that you will collect the sales tax from the end users.

Other Names

Different municipalities have different names for the resale license. They include Seller’s Permit, Use and Sales Tax License, Transaction Privilege Tax, Application to Collect/Report Tax, and Resale Certificate. They all serve the same purpose.

Tax ID Number

Your tax identification number is the one specifically set aside for income tax reporting purposes to the IRS and your state and local authorities. Known as an EIN (Employer Identification Number), you may be required to obtain one from the federal government, as well as from your state government, depending on the size of your business. This number is different from your resale number.

About the Author

Ann Deiterich has been a writer since 1984 in business-to-business communications, specializing in TQM, business/financial topics, office management and production efficiency. As an environmental proponent, nature and science are her areas of interest. Deiterich holds a Bachelor of Arts in English from Albright college and has three expert rating certifications including Grammar, Words/Phrases and Advertising Skills.

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