If you sell anything taxable to customers or rent certain items, your business usually needs to get a seller's permit so that you can properly handle sales tax as well as qualify for tax-exempt purchases for resale purposes. Depending on your locale, you might also see this permit called a sales tax permit, resale permit or sales tax license instead.
To obtain a seller's permit, you'll complete an online registration process through a state government website or submit a physical application. You'll then need to follow through with requirements for paying any due sales tax on time and corresponding with vendors when you're buying items for resale.
Preparing for Your Permit Application
Before you're ready to start applying for your seller's permit, you need to make sure that you've met your locale's requirements for setting up your business as well as gather some key information you'll need to provide.
For example, you'll need to have registered your business with the state or county, selected a business entity and obtained other relevant license numbers. You'll also need to have obtained an appropriate tax ID, like an employer identification number, unless you run a sole proprietorship and can use your Social Security number. Further, you'll need to have made a bank account where you'll store the sales tax you collect and pay it when you do your regular sales tax returns.
Once you've met these requirements, you'll need to have the contact information for your business and its owners ready. Be prepared to give the expected start date for sales activities and have the tax ID, bank account and other available license numbers handy. The sales tax permit application will usually let you know if you'll need any other information before you begin.
Applying for Your Seller's Permit
Once you've handled the preparation, begin your search on your state's department of taxation, comptroller, tax and fee administration or similar government website related to finance. You should find a section for permits and licenses or sales and use tax that will have a link to an online or downloadable seller's permit application. You may find multiple application options for both permanent and temporary sellers, so choose the one that best applies to your business.
When filling out your seller's permit application, you'll need to answer questions about your business activities, owners, estimated sales and key suppliers and also supply the tax ID and bank account details. You'll usually need to report all the locations where you sell your goods, address any transient or out-of-state sales conducted and document whether you'll sell restricted items like alcohol, tobacco or fireworks.
Along with signing the application, you may need to include your drivers' license number for identification. You'll also need other key business partners or officers to sign with you. You'll then submit the online application or follow the paper form's instructions on mailing it in or delivering it to the government office. If required, include payment information for any permit fee or deposit.
Using Your Seller's Permit
Once you've obtained your seller's permit, keep it handy at your business location and preferably hang it in a prominent place. Check your state's regulations on collecting sales tax on goods and services and file your sales tax returns regularly by the deadlines to avoid penalties. If your state requires you to renew your sales tax permit, follow the renewal schedule and pay any necessary renewal fee.
Whenever you purchase items for resale in a place where sales tax is due, you should fill out a resale certificate to provide to the vendor. This will allow you to be exempt from sales tax when you buy the goods and instead pay the tax when you sell the goods to your customers. Keep a copy of each resale certificate on file and keep in touch with vendors in case they need you to make an update or provide a new certificate.
- TaxJar: How to Register for a Sales Tax Permit in Every State
- Avalara: Sales Tax Permits: A State-By-State Guide
- SaleHoo: How to Get a Reseller Permit/Resale Certificate (Sales Tax ID)
- California Department of Tax and Fee Administration: Obtaining a Seller's Permit
- New York State Department of Taxation and Finance: Register as a Sales Tax Vendor
- Texas Comptroller: Texas Sales and Use Tax Frequently Asked QuestionsS
- Do not make sales until you have a permit.
Ashley Donohoe started writing professionally about business topics in 2010. Having experience running all aspects of her small business, she is knowledgeable about the daily issues and decisions that business owners face. She also has earned a Master of Business Administration degree with a leadership and strategy concentration from Western Governors University along with a bookkeeping certification. Some other places featuring her business writing include JobHero, LoveToKnow, PocketSense, Chron and Study.com.