Seller’s Permit

A seller’s permit may also be called a sales tax ID, resale permit, resell permit, reseller permit, pemit license, resale ID, or certificate of authority. This varies by state. Essentially, these permits allow states to control the process of collecting sales tax in that state. In most states, you are required to collect sales tax from customers for any product that you sell.

That can be a more complicated question than you’d think. You may want to speak with a professional accountant about which types of sales you make would require the collection of sales tax. Some states, for instance, require sales tax for expenses such as shipping charges. As a general rule, if you have a physical nexus (a fancy word for a physical connection as it relates to your sales) with the state where a sale of product is made, you will have to collect sales taxes. When you are dealing with e-commerce, it gets more complicated and you may want to talk to a specialist. You’ll also need to do your due diligence as you add additional service or product offerings to make sure you’re still in compliance with regard to sales tax.

In many states, you only have to obtain one permit at the state level. Some jurisdictions may require, however, that you obtain one from your county or city government as well.

It is a tax imposed by state and local governments “in exchange for the privilege” of selling goods in their jurisdictions. Most companies pass through the sales tax to the customer, but it is your responsibility to collect them. If you are making sales of taxable property, you are required to register to collect sales tax in any state in which you maintain a substantial physical presence. If you then make a sale in a state where you have registered, you are required to collect sales tax on any order delivered to that state unless a valid exemption is applied - applicable to the purchasing entity or the nature of item sold.

Some sales are exempt, meaning not subject to, state sales taxes. You may want to visit with your sales tax specialist because it is not always clear, but generally speaking, there are some types of transactions that are more likely to be exempt. By way of example, the following may be exempt: non-profits may be exempt, purchases for raw materials by manufacturers, resellers, drop shipments, necessity goods at your grocery store may be exempt, intangible goods and services, goods sold to governments. While it can be complicated, to be entitled to some of these exemptions, you may need a license Swyft Filings can help you with such as a reseller’s permit.