What Are Sellers Permits?
Seller permits may also be referred to as a resale permit, resell permit, permit license, reseller permit, reseller number, resale ID, state tax ID number, or reseller license permit. A seller's permit is entirely separate from a business license. Each state may have a different name for the seller's permit, but most states require individuals or businesses to obtain one if their business activities involve selling merchandise, vehicles, or any other type of property. Most states even require individuals or businesses that rent out vehicles or tangible goods to obtain a seller's permit in order for them to conduct business in the state. A growing number of states also require business that provide retail sales of taxable services to obtain a seller's permit. What is considered a taxable service varies by each state.
Selller's permits should be obtained well in advance of beginning a business in order to avoid fines or interruption of business activities.
In many states, a seller's permit allows you to purchase goods at wholesale prices and resell them at retail prices.
Seller's Permit Requirements
The requirements to register and obtain a seller's permit vary widely from state to state. Some states may charge an administrative fee or require a security deposit to obtain a seller's permit, while others may not charge any fee. The amount of the fee will also vary from state to state.
Nearly all states require all individuals and business entities to obtain some type of seller's permit if their business activities involve the sale of goods or services. For example, corporations, general partnerships, and limited liability partnerships, are all required to obtain a seller's permit.
Individuals or businesses that have more than one location for conducting business must obtain a seller's permit for each location. For example, if Julie has a bakery on Main Street and then decides to open another location 3 blocks away, she must obtain a seller's permit for each location even though both locations are involved in the same business in the same state.
Most states do not allow seller's permits to be transferred from one business operator to another. For example, Bob's Burgers is owned and operated by Bob who obtained a seller's permit when he started the business, but if Joe buys Bob's Burgers, Joe will have to obtain a seller's permit even though the business will continue under its original name.
Individuals or businesses must obtain a seller's permit for each new business. For example, if Ann owns Ann's Antiques, but then later decides to open another business called Ann's Antique Repair, she must obtain a seller's permit for that new business.
Information Required for a Seller's Permit
The amount of personal information that must be submitted by individuals or businesses to obtain a seller's permit vary by state. Some states may require more or less, but below is a list of paperwork generally required to obtain a seller's permit:
- Social Security Number
- Date of birth
- Contact information including email address
- Driver's license number, state ID number, passport or military ID
- Incorporation date, corporate number, and FEIN number, if a corporation or LLC
- The name and location of bank accounts, and names of those maintaining the accounts
- Information on suppliers
- Personal references
- Projected monthly taxable sales
State Agencies Responsible for Seller's Permits
Prior to beginning business operations, it is advisable to contact the state agency responsible for issuing seller's permits. In most states, the department of revenue or the state board of equalization will be the appropriate contacts for obtaining more information regarding state-specific requirements for seller's permits. Another good starting point is to contact a local business or consumer affairs office or local business attorney to obtain guidance on requirements and procedures for obtaining a seller's permit.