Resale License

Are you new to selling online, or even selling products in general? A sometimes forgotten element that is needed in order to participate in eCommerce or even a brick and motor business model is a resale license. While this article will have some general steps needed to acquire a resale license, additional information from the specific state that you are operating your business in will be needed. 

Resale Permit Overview

A resellers licence (aka resale permit) is required in order for you to not pay sales tax on items that you are planning on reselling to your customers. You can see the benefits of a resale licence already, as you can save 7-10% on your wholesale purchase by obtaining a license. In addition to the monetary savings, many manufactures will not allow you to open a dealer account without a resale license, as they assume that if you have a resale license that you are a real business not just looking for a personal discount. Lastly, a resale license also allows you collect tax from your customers to pay to the state. Without the permit, a business is technically not allowed to collect sales tax. 

How To Apply For a Resale License

Since every state issues their own resales licenses, you will need to contact your state tax department in order to apply. The physical business location is what matters when it comes to applying. So even though you are opening a eCommerce website that sells nation wide, you only need to apply within your state.