If you own a store and sell goods, then there are many processes you must go through. From getting licenses to obtaining permits, the to-do list goes on and on for business owners. But by understanding what you need to accomplish and the tools you need to get there, owning and running a business can become a little less stressful.
One of the key permits we’ll be discussing today is called a seller’s permit. Whether it’s a New York seller’s permit, a California seller’s permit, or any state at all, we’ll explain everything you need to know about these permits. Find out what they are, who needs them, and how to obtain one for your business.
What is a Seller’s Permit?
When you start to sell products or services, you’ll need a seller’s permit. Wherever you sell, you’ll need to obtain a seller’s permit in that state, and this is done to collect sales tax. The sole purpose of these permits is so the state can control the process of collecting, reporting, and paying sales tax. Depending on your state, these permits may also be called a resale permit, resale ID, reseller license, or something else.
Does Your Business Need One?
If you plan to lease or sell any services or products, then you are required to apply for a seller’s permit. Even if you don’t believe you have to collect sales tax, you still need to apply. However, given that some states don’t have sales tax, you aren’t required to apply for a permit in these states. It’s also important to note that some states also require that sales tax needs to be paid on gift wrapping and shipping charges. But to fully understand sales tax, you should note that sales tax varies from state to state and is based on the following factors:
- Types of products sold
- Types of services offered
- Whether there is tax for online transactions
The rules surrounding state tax are different for each state, so it’s best to do research on what pertains to your certain situation.
How to Get a Permit
Luckily, getting a seller’s permit is a relatively easy process. In fact, most states allow you to file your application and pay on an online portal. To get started on you state’s seller’s permit application, head over to the website of your State Department of Revenue to find the online link.
As you’re filling out your application, there are some common areas of information that you’ll need to include, which typically involves:
- Your business name
- The date you intend to start collecting sales tax
- What products and services you sell
- The estimated sales tax you will collect