People who start their own businesses are required to get a vendor's (business) license for paying local sales taxes. There are basically four types of vendor's licenses: Service, retail, transient and delivery. If you are selling items on the Internet, for example, you would need a retail vendor's license. You would be required to collect sales tax from customers that purchase items in your state only. Following are the steps for procuring a vendor's license.
Obtaining Your Vendor's License
Contact your county auditor's office. Ask for the county clerk. Find out what the requirements are for your type of business in your area.
Request a vendor's license application through the county auditor's office, or have them direct you to their online site. If you are registering online, download the application. Find out if there are any permits that you may need for your business
Determine a name for your business before you fill out your application. Enter this business name as your DBA ("Doing Business As"). Fill out the application. If you are a sole proprietor without employees, enter your Social Security number on the application in lieu of an EIN. Enter your EIN if you have employees. Enter you business name, address and include your name as the business owner. Complete the vendor's license application and sign your name and the date at the bottom. Complete any other necessary forms.
Mail or complete your application at the county auditor's office. Pay the required fee.
Wait several weeks for your vendor's license. Renew the vendor's license each year when you are notified by mail.
Your state is likely to have different laws on operating your business. For example, if you plan to run the business from your home, zoning laws may prohibit that option. Thus, you would need to find an office in an area suitable for your operation. If you are incorporating your business, a number of other forms will need to be completed. Take the time to understand all the necessary paperwork up front to ensure that you are operating within the parameters of the law.
Never just ask for a vendor's license without fully understanding all the necessary legal registrations and forms that are required. You will have a number of forms to fill out if you have employees, or if you are incorporating your business.
- Siri Stafford/Digital Vision/Getty Images