A resale license, also known as a wholesale number, is used by business owners to buy wholesale merchandise and resell it to the general public. This license number gives business the right to buy wholesale goods without paying sales tax. Each resale license comes with a number that identifies your company. This number is also required when buying wholesale items from the seller. To get a resale license, a person needs to follow the regular procedure for getting a business license through local and state governments.
Apply for an Employer Identification Number, also known as a Federal Tax ID. An EIN is required to have employees and to collect sales tax in your state. Apply for an EIN through the U.S. Internal Revenue Service website. Applicants will submit IRS form SS-4. There are no fees associated with this submission request. Your EIN is provided in three to five weeks.
Contact your local tax department or secretary of state to obtain a sales tax identification license and number. This license prohibits business owners from paying sales tax on wholesale items that are intended for resell. A resellers license does not help a person to avoid paying their regular income taxes. This license also authorizes you to collect sales tax and render it to the state. Call to inquire about local sales taxes.
Visit the state Department of Revenue to fill out an application for a wholesale license. Depending on the state, each will ask for an EIN and sales tax number. These numbers are required to complete the resellers license application. Contact the state Department of Revenue for additional information regarding application processing times and fees. Review the application carefully before submitting. Usually, a nominal license fee is required to process the application.
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