Obtaining a sellers permit is one of the necessary first steps for business owners seeking to launch a new operation. Depending on the state where business is done, a sellers permit may be referred to officially by a number of other titles, including: wholesale permit, wholesale license, resale license, resell permit, resale ID, among others.
The sellers permit is not the same thing for a business owner as the business license. A business needs to go one step further and acquire a sellers permit when that business engages in the selling of merchandise, automobiles, or various types of property. Even renting out goods merits a sellers permit in most states. The retail sale of taxable services may also require business owners to obtain a sellers permit in certain states—as what is deemed a taxable service will sometimes vary.
Why is a Sellers Permit Needed?
It is important to research how each of the states you operate in makes these distinctions when deciding whether a sellers permit is needed. The best way to do this is to get in touch with the applicable state agency responsible for issuing sellers permits. Additionally, it is a smart decision to acquire a sellers permit long before the business begins operations so that any potential State fines may be avoided that might interrupt or hinder business operations. Once obtained, the sellers permit (in most states) allows a business to purchase goods at wholesale prices and then resell the items at a retail price.
Qualifying for a Resale License
What is required to register for and obtain a sellers permit will often times vary between states. Certain states will charge an administrative fee, or even ask a security deposit, before providing a business with a sellers permit. Other states may not ask for any preliminary fees. Again, it is a matter of checking the requirements of the specific state where your business plans to operate and sell or resell good or taxable retail services. Obtaining a sellers permit is required across all states whether the business is a sole proprietorship, partnership, or a corporation.
If a business seeks to operate in multiple locations, a sellers permit must be obtained for each of the business locations. Even if the locations are all operating within the same state where the same rules for resale licensing apply, every separate operation must obtain its own sellers permit.
Sellers Permits are almost never allowed to be transferred from one business operator to another. Even if you sell a business that already has an approved sellers permit to someone else, that new owner will need to renew the sellers permit/ wholesale license / resale license once the business is under his or her name. This applies even if the business continues to operate under its original name.
What info must be given for a Sellers Permit?
Different states may ask for varying information for paperwork in order to obtain a sellers permit / wholesale license / resale license / etc. However, there are some general information that is asked across virtually all states, that will be handy to have ready when acquiring the paperwork. This basic information includes the following:
SSN, DoB, Contact Email, Driver’s License/State ID, Incorporation Date, Corporate Number, and FEIN Number (if a corp or LLC). Name bank accounts and persons responsible for maintaining the accounts. Provide personal references. Projected monthly taxable sales.
Are you ready to obtain your sellers permit today, if so please contact Signature Filing today or click here.