How to get a Resale License (Sales Tax ID)

 

Hey, would you like to pay tax that you don't actually need to pay?

I'm guessing your answer is a big, fat "Nope." No one does, which is why if you're going to get into the retail business, you need a reseller's permit (also called a resale license, reseller's license, resale certificate or reseller's certificate, sales tax permit or sales tax ID).

If you're a US-based seller, you don't need to pay sales tax out of your own pocket for the products you're reselling to others. Your customers will pay it when they buy the product. You'll collect the money and send it to the state on a routine schedule.

A reseller's license is your flag saying "I sell to others. I can buy wholesale products without paying sales tax because I pass the tax onto my customers." 

How Do I Get a Sales Tax ID/Reseller's License?

Half the trouble with signing up for a sales tax license is finding where to go!


To get started, you need to find your state tax department. For example, someone based in New York would go to the New York State Department of Taxation and Finance (either online, by phone or in person) and fill in the appropriate form.

You'll find that when you've made your way to the right website, most of the information and forms you need are just waiting for you. 

That's why I've got this nifty map to help you find your way faster:

Click on your state to find the right sales tax information for you,
and register for your license.

 

 

 

 
Sales Tax Applies
 
No Sales Tax

 

 

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Once you get your sales tax ID, the state will start sending you monthly/quarterly statements. In some cases, states will use your federal EIN as your sales tax ID. In some cases, they'll issue you a separate number. 

Sales Tax: A Brief Overview

Sales tax is a tax levied on all sales of physical goods to consumers within most states. Some states also charge sales tax for certain kinds of services.

Not all states charge sales tax: if you live in Delaware, Oregon, New Hampshire, Montana or Alaska, then sales tax either does not apply or applies only in certain circumstances. For sellers in any other state: yes, you do need to worry about sales tax!

You can find your state's sales tax rate here. It is important that you do this, because taxes vary significantly among the different states. For instance, some have one rate that applies state-wide, while in others, the rate varies between counties and cities.

Determining what state(s) you need to pay tax comes down to where you operate. A base of operations is called a "nexus." If you are dropshipping from home, you'll only be responsible for that state's sale tax because you only have one nexus. If you have a storage warehouse in another state, you have a nexus there, too. If you opt to ship goods via Fulfilled by Amazon, you technically have a nexus in whatever state(s) your goods are warehoused in.  

Note: In some states you also need to collect sales tax on shipping and handling.

You can learn more about sales tax here

A Bit of Extra Information for You

There are a few other things to consider when looking into the taxes you'll be responsible for as a seller. 

  • Reseller's Permits and Buying Wholesale 

    If you are a US citizen purchasing wholesale goods from a supplier within the US, then you will probably need a resale certificate or license from the state in which your business is located.

    A resale certificate or license enables you to purchase goods wholesale without paying sales tax. It also allows you to collect sales tax from your customers, the end consumer.

    Without a resale certificate, you will have to pay sales tax on the goods you buy wholesale and then also charge sales tax. In this case you can add the sales tax you paid as a deduction on your return, but it is much less complicated to just present your reseller's license when you buy.

    Most wholesalers will ask to see a sales tax ID or reseller's license before they will sell you the goods. This is because they are legally obliged to check whether you are able to collect sales tax from the end user.

  • Use Tax

    Another thing you may come across is something called "use tax." This tax is in place to discourage people from shopping in states with lower taxes than their own.

    Use tax means that if you purchase goods in another state, you owe tax equal to the amount you would normally have paid in your own state. It will also apply to you if you buy goods intended for resale and then end up keeping them for your own use.

    The good news is, if you are based in one state but ship to customers in another, you're not obligated to collect sales tax or deal with use tax at all. Just as you're responsible for paying the use tax if you get your supplies from out of state, your consumers are responsible for the use tax when they buy from you. 

    Obviously you could potentially get away without paying use tax because it works on an honor basis. However, should you be audited, use tax is something auditors like to hone in on. As a result, many new businesses get caught in the cross-hairs. Therefore it is wise to make sure that you pay it and keep the appropriate records.

  • Collecting Sales Tax on eBay or Your Website

    The process for collecting sales tax will differ depending on where you're selling.

    If you're selling on eBay, for example, you can learn how to collect sales tax on eBay here. The process basically looks like this:

    1. Go to "My eBay."
    2. Click the "Preferences" link from the left-hand navigation bar.
    3. Click "Show" in the "Payments from Buyers" section.
    4. In the "Use Sales Tax Table" section click "Edit."
    5. The "Sales Tax Table" page appears.
    6. Find the state you want to start charging sales tax in and put in the correct sales tax amount in the "Sales Tax Rate" field. You can also opt to charge sales tax on shipping and handling, if it's required.

If you're selling on your own online store, or if you're planning to in the future, things can get a little tricky if you're not careful!

The best thing to do in this case is hire an accountant, or use tax software such as Avalara to keep track of the sales tax you need to collect and pay. 

If you create your own online shop with SaleHoo Stores, setting up your sales tax collection is automated and easy.

  • Records to Keep

    You need to keep your resale certificate(s) on file as part of your business records. You must be able to match your sales records with the certificates for audit purposes.

  • Reporting Sales Tax

    How often you need to complete Sales and Use Tax reports will depend on your monthly sales turnover and the state you are working from.

It's very important you are sure to collect the correct amount of sales tax, as you will be held liable for the difference if you come up short.

Note: Trading Assistants do not need to collect or remit sales tax.

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397 comments


Posted by Hector Ariel Febles Benitez on 22:14 24 Jun 2016
Hi Gina, Im from Dominican Republic, butt plan to sell good in the USA What do I need to do Tax wise?? Reply
Posted by Melissa Johnson on 17:50 8 Aug 2016
Hi, Hector!

Unless you incorporate in a US state or establish a base of operations in the US, you aren't obligated to deal with taxes here, just your home country.

Hope that helps! Reply
Posted by daniel popa on 11:15 20 Aug 2016
not that i am an expert in taxation ....but this sounds wrong....if one sells a product on usa ebay to an usa citizen in the state of say california....then should not the seller charge tax and pass it to the gov of california since the transaction is within usa and the buyer is based in california???
Posted by Melissa Johnson on 17:01 22 Aug 2016
eCommerce falls into a bit of a nebulous area just by virtue of being a global thing. It depends entirely on the seller's location.

If you have a base of operations in the US (a "nexus," technically), you're liable for taxes in the state where your nexus is located. But if you're based abroad and have no physical presence in the US (such as dropshipping from a foreign country), you're not. However, any goods you ship from a foreign country into the US might be subject to customs duties, which are the responsibility of the buyer. If they don't pay, the item is sent back.

http://blog.taxjar.com/international-sellers-deal-sales-tax-u-s/
Posted by yalloak on 0:34 24 Jun 2016
Hi Gina, I am based in Australia but wish to only list products on the US eBay platform for sale to US residents. What is the situation regarding Tax and/or any licencing requirements to become a reseller? Reply
Posted by Melissa Johnson on 21:46 24 Jun 2016
If you're outside the US, you don't need to worry about paying tax in the US unless you choose to incorporate there (doesn't sound like that's what you're interested in). Otherwise, all you have to worry about is meeting eBay's requirements and Australia's tax laws. Specific dropshipping companies might want to see proof of business, but that isn't true of all companies. I would check with an accountant about what you need tax-wise in Australia.

Good luck! Reply
Posted by Robin B on 13:57 20 May
I have a question. I am planning to start selling on ebay. These will be hand made items that I will be purchasing and reselling. I have never seen anyone collect tax on ebay (certainly I've never paid any). How does that work exactly? Reply
Posted by Melissa Johnson on
Hi, Robin!

eBay is a very different creature than Amazon, since most eBay sellers are independents and eBay doesn't sell directly or offer warehousing services for sellers. Sales tax law varies according to what state you are based in, further complicating the matter.

You can enable sales tax on eBay (see here: http://pages.ebay.com/help/pay/checkout-tax-table.html#charge )

However, you may not need to, depending on your state's individual laws. (Generally when you're selling to people in another state you don't have to charge sales tax.) It's also possible that some sellers just build the cost of sales tax into the price of the item.

I would talk to an accountant about the matter and figure out what you need to do. Reply
Posted by Manuela Marie Basilio on 22:25 16 May
Hi!

I am based in New York but not a US resident. I am on an O1 visa and would like to start doing dropshipping as an extra source of income. I am wondering if I can apply for a sales tax ID or if I am even allowed to do this business. Thank you! Reply
Posted by Melissa Johnson on 15:31 25 May
Hi, Manuela!

Honestly, I don't know. I am not an expert in immigration law. It looks like with an O1 visa you may be able to, but you're best off contacting a lawyer or an accountant to verify, especially because commerce is generally regulated by the state, not the federal government. I know that under about $600 is considered "hobby" income and generally doesn't need to be reported, but it sounds like you're looking for a bit more than that. Reply
Posted by Amos and Patricia Ahchong on 12:29 16 Apr
Hi Do we in New Zealand have to pay this set up and ID.

Thank you Reply
Posted by Amos and Patricia Ahchong on 11:45 7 Apr
HI I got a bit confused with all the tax info, I just wanted to clarify, so if I sell on say Ebay do I have to have a sales tax id? As I wanted to start small just things from home. Your advice will be much appreciated as I really want to do things right and branch out as I have been selling just on trademe and bidbud.

Thank you Reply
Posted by Melissa Johnson on 16:19 18 Apr
Hi, Amos!

If you're not based in the US (no premises, no nexus, no incorporation) you're not obligated to get a sales tax ID. Instead, you're subject to the laws of your country, which will obviously vary.

In the US, you can make somewhere around $600 in income and have it be considered "hobby" income. You don't have to report it and it's not considered a business. I don't know if the same applies to New Zealand -- I would check with an accountant. They're the best qualified to give you advice on the matter.

Hope that helps somewhat! Reply
Posted by adriana on 23:28 22 Feb
Hi. I'm from mexico and would start selling products from a Facebook page . I wonder who would have to pay tax on my country and us . if you only sell for facebook and not on a website , they would pay taxes ? Reply
Posted by Melissa Johnson on 4:47 24 Feb
Hi, Adriana!

Sadly, there are too many variables in your question for me to tell you what to do. Are you selling arts and crafts? Dropshipping? Where are your buyers coming from?

Generally, no matter where you're selling, if you make enough that it can be considered a "business" (In the U.S., the threshold is about $600 annually), you're going to have to pay taxes. If you're based in Mexico, that's where you'll pay taxes unless you actually incorporate and establish a presence in the U.S.

An accountant is the best person to advise you. They'll know the ins and outs of what to do.

Hope that helps a little, at least! Reply
Posted by Toni Patterson on 20:40 16 Feb
I am trying to get my wholesale license or seller's license in ga. Now once i get my license can i go to new york to buy items with my ga wholesale license or sellers license? Reply
Posted by Melissa Johnson on 17:30 17 Feb
You should be able to, yes, but you might want to check with the individual suppliers. Reply
Posted by Matthew Miner on 17:20 15 Feb
Hi,

I have an EIN and was wondering if there is anything I am missing to cover myself for taxes and sales. I plan to dropship and sell strictly online. I am running my business out of Mass.

Thanks, Reply
Posted by Melissa Johnson on 17:29 17 Feb
Hi, Matthew!

Here's a link that may be of some help: http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/salesuse-tax-guide.html

Definitely plan on collecting sales tax for any sales within MA. However, your best bet is to talk to an accountant. They know the tax laws better than anyone. Reply
Posted by Meet Patel on 11:25 10 Feb
Hello there,

We are an online marketplace that wish to re-sell products sold via different companies. Our company is incorporated in DE but is operated from abroad. Since DE does not require any certificates to re-sell, we don't have to get a re-sell permit there.

My question is I have a virtual mailbox in CA (virtualpostmail.com) - I am guessing this means I have nexus in that state. Do I have to get a re-seller permit in CA? Reply
Posted by Melissa Johnson on 20:42 14 Feb
I don't know that you'll need a reseller permit since it sounds like you're sourcing online. Depends on what your suppliers want to see.

However, you may be liable for taxes in California, at least based on this: http://www.boe.ca.gov/sutax/outofstate.htm I don't know how you use your mailbox.

I suggest talking to an accountant or attorney just to make sure. They can guide you through the process. Reply
Posted by nghia on 6:05 1 Feb
Hi,

If i have a re-seller permit, if i were to buy stuff like at walmart or some other retail store, do i have to pay sales tax on it? If i don't, how does it work with individual retailers if i were to order from them online? I know when i go to a wholesaler, they ask for my verification. Reply
Posted by Melissa Johnson on 20:14 3 Feb
You shouldn't have to pay sales tax, no. you'll just have to keep your permit on you to show. Most places won't accept a photograph of it as proof. I don't know how it works online because every store is different, but if you contact site support I bet they can tell you. I know Amazon allows you to set up tax exemption when you buy online. Reply
Posted by sal on 4:58 30 Jan
hi am am trying to start and online busniess i and looking on the new york site and can not find a section that says any thing about a resale license would you be able to help.
thank you
-sal Reply
Posted by Melissa Johnson on 20:11 3 Feb
Hi, Sal!

I'm not familiar with how New York state tax law works. However, I think this might be a good starting place: https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/how_to_register_for_nys_sales_tax.htm

It appears that most businesses are responsible for issuing their own exemption certificates. However, your best bet is probably to talk to an accountant or other tax expert to be sure.

Hope that helps! Reply
Posted by Parasuram Kappati on 16:00 25 Jan
Hi I have a registered LLC co.in Delaware do I need MI registration to sell products ON LINE from MI,

Shall I need import licence to import steel products from India in to US. Reply
Posted by Melissa Johnson on 18:10 26 Jan
Hi there!

I assume you're based in Michigan? I believe that would create a nexus, which might obligate you to pay taxes in Michigan.

Importing any sort of product in bulk will require you to go through customs; however, since steel is generally a raw material it'll be a bit different than retail goods.

Your best bet is to talk to an accountant or other tax expert, plus a customs broker, to figure out the logistics.

Hope that helps! Reply
Posted by Osama on 10:12 25 Jan
Hi,
I am a digital marketing Specialist. Now looking to start my Own E commerce business with the help of drop shippers. My target market is US. Need some guideline how to start my business & do i need to register my company in US & how to get a re-seller certificate as i am a non us citizen.

Thanks Reply
Posted by Melissa Johnson on 18:01 26 Jan
Hi, Osama!

Here's a really good, comprehensive starter guide: http://www.salehoo.com/dropship

To register your company in the U.S., you'll have to pick a state and incorporate there, then file the necessary paperwork to get set up to pay taxes, get a reseller's permit, etc. However, you don't necessarily need to do all that -- you can still dropship from abroad. Some U.S. suppliers will be happy to work with you as long as you provide equivalent proof of business. Reply
Posted by Maria Requena on 20:22 24 Jan
Hi I am based in Mexico, what happens if I sell to US customers through my website, but by from US suppliers, do I need to register to have a Tax ID , even though I pay taxes in my country? Reply
Posted by Melissa Johnson on 17:54 26 Jan
You'd only need a tax ID if you were to incorporate in the U.S. You should check with suppliers -- many of them will be happy to work with you as long as you provide proof of your registration in Mexico. Reply
Posted by Hamid on 1:38 16 Jan
My name is Hamid
i am international businessman from Libya. I am trying to buy shipping container from US, but the require business tax id and business registration. so my question is How Do I Get a Tax ID and business registration ?
Thank you Reply
Posted by Melissa Johnson on 17:04 18 Jan
hi, Hamid!

In some cases you can provide proof of your business' registration in your home country as equivalent. However, commerce in the U.S. is regulated by individual states. So you would have to go through the steps to incorporate in the state of your choice (Delaware and Nevada are popular options, though you can choose any state) and file the appropriate paperwork to get the tax ID and any other documentation. You can get assistance with that from an attorney or an accountant, typically -- I would look for someone who has a background in international business. Consulting an expert is just the best way to make sure everything goes smoothly. Reply
Posted by Michelle Williams on 9:04 12 Jan
I'm trying to figure out if its worth it. I want to sell on Amazon and eBay. Mostly dropshipping but I would like to sell a few items on my online store. I need a resellers license to buy a few items from wholesallers, any suggestions? Reply
Posted by Melissa Johnson on 17:21 14 Jan
I suppose it depends on what you're interested in selling! We generally recommend that our members pick a specific niche and stick to it rather than having a general mish-mash of products.

Having your own store is a good counterbalance to selling on Amazon and eBay. the best part is you don't pay the same sort of seller's fees; just whatever payment processing service you use. Reply
Posted by Frinze Delis on 7:33 11 Jan
Hi Salehoo staff. Suppliers were all asking for resellers tax id and I am based in Canada. As ive read the thread here, I cant find the answers how, even in google. Can you give me a name of member here in salehoo that is based in Canada that does dropshipping? So that I can ask him/her on how he get his business license? Thanks a lot salehoo Reply
Posted by Melissa Johnson on 20:05 11 Jan
In most cases, providing proof of your business' registration in Canada will be sufficient.

If you want a US-based reseller's tax ID, you'll first have to incorporate within a US state first, which means filing the paperwork, paying fees, and designating a registered agent.

If you're looking for another member who is also dropshipping from Canada, i think the best way for you to do so is to check out our forum: http://www.salehoo.com/forum/

You can also reach our support team at http://www.salehoo.com/support

Hope this helps! Reply
Posted by NOREEN DUNN on 18:18 5 Jan
Hi! I'm Reenie from NY. I have a valid business and NY Sales TaxCerificate of Authority. I buy and sell auction items on Ebay. I am going to auctions in Florida soon and would like to know if I can present my NYS certificate for tax exemption. I did this last year, one auction house was good with it. another was not. I have yet to find proper information in regards to the legality. Florida I believe has a 6% sales tax rate and our county here in NY is at 8%.

Thanks in advance for any information!
Reenie Reply
Posted by Melissa Johnson on 22:38 8 Jan
Hi, Reenie!

I've done a bit of digging and I haven't actually found an answer to your question. Honestly, it may be something that varies from one auctionhouse to another. If you have any questions, though, you might actually try contacting the Florida Department of Revenue: http://dor.myflorida.com/dor/taxes/gta_contact.html Reply
Posted by Roxy on 4:17 4 Jan
Good night, I am living in Jamaica. Would I be able to sign up successfully with Salehoo? Reply
Posted by Melissa Johnson on 22:21 8 Jan
Hi, Roxy!

Yes, you should be able to register. Reply
Posted by Mohamed Diab on 15:16 31 Dec
So, please if anybody could help i'll be grateful.
I'm not a U.S citizen but i'm Egyptian, and i would like to know if there any possibility for creating a ST ID to be able running my first contacts with suppliers who requested sales tax ID, i'm only a drop shipper / re seller on ebay & amazon and didn't create my own web store yet.
So any help will be appreciated on this please.

Regards Reply
Posted by Melissa Johnson on 20:16 31 Dec
Since you're based abroad, the only way to get a sales tax ID would be to incorporate your business in the U.S. and then file the necessary paperwork in the state where you incorporate. I think you'll also need a registered agent. Of course, doing so will obligate you to pay taxes in the U.S., but I'm not sure what the eligibility requirements are for creating a business in the U.S. It's something to discuss with a tax professional -- they can advise you best.

If you tell your suppliers you're based internationally, they may just ask for the equivalent documentation for your home country. Your best bet is just to ask if they work with international clients, because if they do, it'll save you the trouble of having to incorporate. Reply
Posted by Rustam uktamov on 0:32 28 Dec
hi there. I have registered as a sole proprietorship in state Virginia. I have FEIN too. The certificate to be filled out from the supplier asks for "certificate registration number". Any idea where can I get that number? My business account with www.business.tax.virginia.gov does not show me such a number. Thanks! Reply
Posted by Melissa Johnson on 20:07 31 Dec
It looks like you need form ST-4 -- if you don't have that, you'll need to apply for one:

http://www.tax.virginia.gov/content/sales-tax-certificates Reply
Posted by Craig Simms on 13:31 15 Dec
Hi Melissa,

Here is my situation, I am Canadian living in Canada. I own a US C-Corp registered in Delaware. The company's mailing address is in NY and the fulfillment company I use is in Michigan. I am looking to add a new US supplier but they require a state resale tax certificate. My question is what state in your opinion would apply, I was under the impression Michigan was my greater presence as actual physical work is being performed there..

Regards and thank you in advance.
Craig Reply
Posted by Melissa Johnson on 1:09 21 Dec
Your business is headquartered in Delaware, which is tax exempt: http://revenue.delaware.gov/services/Business_Tax/Exemptions.shtml So you should let the supplier know that and provide the appropriate documents.

If you're paying taxes to the state of Michigan, you should be able to get the required documentation from MI, but if you're not obligated to pay tax there, you shouldn't have to show a resale tax certificate at all. Reply
Posted by Mike on 19:34 12 Dec
Hi.
I recently purchased a furniture based import business based in California.
I want transfer the resale license to Montana as I live there.

I buy product from Africa at wholesale, ship it to the U.S. and sell it.

My issues are that I am not yet a U.S citizen; am currently in California for a few months, but reside in Montana and don't know how to transfer the resale license with regards to crossing states and Montana having no sales tax.

What do I do and how long does the process take?

Any information would be greatly appreciated.

Thank You Reply
Posted by Melissa Johnson on 22:02 14 Dec
Hi, Mike!

In this case I highly, highly recommend that you talk to an accountant or other tax expert, one who's based in Montana. They'll know what paperwork you need to file to change your business' address, etc. Since Montana doesn't have sales tax there shouldn't be as much work to do, but it's definitely best if you talk to a licensed expert. Reply
Posted by Nadia on 20:42 1 Nov
Hello! I still don't know if I get it.
I live in Brazil. I want to sell on Amazon US from US dropshippers as an individual (I am not a company). In other words: want to do business only in US, nothing to do with Brazil, despite the fact that I live here. Do I have to collect taxes? Do I have to have an US bank account to receive my money on Amazon.com?

Thank you so much!!! Reply
Posted by Melissa Johnson on 16:29 3 Nov
Hi, Nadia!

I have no idea what the tax implications are in Brazil. However, here's a really great link about what you need to sell on the US Amazon site when you're outside the country.

http://markscottadams.com/how-to-sell-on-amazon-if-you-live-outside-the-usa/

Hope this helps! Reply
Posted by lemyr g silva on 21:45 31 Jul 2016
Hello, Nadia! I'm pretty much in the exact same situation as you. I'm also from Brazil(Campo Grande-MS). If you would like to talk about this so we can learn together, I guess it would be awesome. Feel free to contact me at wannabeimporter@gmx.com . Abraço! Reply
Posted by Nick on 15:22 30 Oct
Hi there...
I hope you can help. I sell on Amazon and was just approved to sell a huge line of products from a company. Problem is the company says I need to have a tax certificate for each state. The company is located and ships from Texas and I am in WA state. Wouldnt I just need my resale for WA and a tax certificate for Texas since that would be considered a nexus? Really hope you can help. Reply
Posted by Melissa Johnson on 20:31 30 Oct
Hi, Nick!

I'm not sure honestly.The resale certificate for WA is essential because it's your home base. I'm not sure you'll have a nexus in TX given the circumstances you've described. However, if you plan to use Fulfillment by Amazon, I believe you'll be responsible for taxes in whatever state you warehouse the products in -- that may be what your supplier is referring to. It's best to ask them for clarification, though. Reply
Posted by Holly on 23:19 21 Oct
I am a small handcraft business located in Kodiak Alaska. I have a business license, but I have searched everywhere for a resale permit and I can't find anything about it. According to the website for Alaska, each municipality is in charge of a resale permit. Where we live does not have one applicable. Do I submit only my business license and explain my situation? Or should I pop for a resale certificate in another municipality even though I don't conduct business there? Reply
Posted by Melissa Johnson on 16:07 25 Oct
Hi, Holly --

I would stick to the business license, I think. Alaska doesn't have a sales tax imposed, except for some municipalities. A quick Google search suggests that Kodiak has a sales tax, but you said it doesn't issue resale permits. I'm also not finding much online that explains it.

Honestly, I would talk to an accountant about it. They should be able to get you squared away. Reply
Posted by Carlos on 11:20 21 Oct
Good morning.

My name is Carlos and few weeks ago I decided to register a business entity in the state of Delaware.

I'm still in the process of getting all the paperwork back from the state filling but I'd like to ask something in regards to a blog post here:

https://www.delawareinc.com/blog/101what-is-a-tax-exemption-certificate/

I decided to start an ecommerce business and this is why I decided to register a business in the US. I am physically located in Romania (Europe) and ofen I am asked for a resale certificate from the suppliers I am working with.

Could you please be so kind to let me know how do I request this certificate? I read your post in the website but I believe it only applies to US citizens. What is the process for foreign people registering in US as a business?

The reason I ask is because of this statement:

"The physical location of your business is what determines where you apply for the resale certificate"

What happens if my business is not physically located anywhere? I mean, I use a registered agent which I pay annually but other than that, my business is online and I do not have headquarters in USA.

Do I qualify to get a resale certificate?

Looking forward for your reply, thank you.

Best Regards,

Carlos Reply
Posted by Melissa Johnson on 17:30 25 Oct
Hi, Carlos --

Delaware doesn't collect sales tax, so it doesn't provide resale permits as far as I can tell. You should be able to provide your business license to most retailers as a substitute, but I would double check with an accountant or other tax expert just to be sure. Frankly, I'm not finding much helpful information online.

Registering in the US isn't hard. Generally it's handled by individual states (in your case Delaware). It looks like you're required to get a federal EIN as part of the Delaware registration process so I think that's all you need.

If you have more questions, I recommend checking out our forum. Some of the other sellers might have more specific advice: http://www.salehoo.com/forum/ Reply
Posted by Mac on 1:28 20 Oct
Hi,

If I use a Resell Certificate to buy goods here in the states and sell those goods in another country then do I have to report the sales to the Us gov afterwards or it does not apply to the sales took place in different country ?

Also, can I use a foreign resale certificate to get exempt from state sales tax or it has to be from one of the 50 states ?

Would really appreciate if anyone inform me about this. Reply
Posted by Melissa Johnson on 16:24 25 Oct
Hi, Mac!

There are a lot of variables to consider here, so I can't really say anything with certainty. I did some digging and found this:

"In general, if a sale is made to a company for export outside of the United States, it is not subject to sales tax. However, in order for this exemption to apply, delivery must not be made to the purchaser within the United States. The seller must deliver the property either directly outside the US or to a qualified export agent."

http://www.salestaxsupport.com/sales-tax-information/sales-tax-help-questions/answers/sales-tax-exemptions-on-export-sales/

Generally you only need to pay and report sales where the sales take place. Some wholesalers and suppliers will accept international certificates, too. So it depends on whether you want to set up an actual presence within the US, or just let an export agent/customs broker handle the matter. Just letting a customs broker act for you seems like it will be the simplest option.

If you have other questions, you can always ask on our forum. Some of the international sellers there might have answers for you! http://www.salehoo.com/forum/ Reply
Posted by Twana Samal on 22:58 19 Oct
Hi
I live in Iraq and want to buy wholesale merchandise online from the US and resell them in Iraq. The Wholesale companies require always reseller certificate or if I plan on shipping to the USA prior to my country and would like to register with the US address of a shipping partner that I utilize they will need a letter from My Shipping Company that has the following requirements:
Document is on shipping company's letterhead.
Document indicates I am a current customer.
Document lists the USA address I am permitted to use for my shipping needs.
Document is signed and dated.
Could you give me some information about some shipping companies that can provide me the above mentioned documents?
Many thanks for considering my request.
Twana
Reply
Posted by Melissa Johnson on 15:44 25 Oct
Hi, Twana!

I'm afraid I don't have any specific recommendations for shipping companies.However, you can ask in our forums! Other members may have suggestions for shipping companies to use based on their own experiences: http://www.salehoo.com/forum/

Good luck! Reply
Posted by on 18:47 16 Oct
Hello!

I started my own business. I am working at my home. I received my business license and have recently gotten my EIN#. Now like some of the others stated i need my resale certificate. I clicked on my state of KY above and it did take me to the dept of revenue. I clicked on resale certificate and it took me to the certificate, but there's not really anywhere for me to put my information or does it tell me where i send or email the paper once i fill it out.. could you please help me.. Thank You! http://revenue.ky.gov/NR/rdonlyres/C823226E-961F-4790-9FBC-734319C10B64/0/51A105713_WEB.pdf Reply
Posted by Melissa Johnson on 16:45 19 Oct
Hi, Toni --

Frankly, I don't have all the answers.

You might be able to submit an application through the One Stop portal: http://onestop.ky.gov/Pages/default.aspx

Otherwise, these are the links I have:
http://revenue.ky.gov/business/register.htm
http://revenue.ky.gov/NR/rdonlyres/F2897C4C-AEEF-4AA5-826C-A8E87944CE29/0/10A100P713FillIn.pdf

Your best bets are to call the tax office directly, or to talk to an accountant. Not only will they be able to help you straighten out the issue, but they'll also help you figure out what records you need to keep for filing taxes.

I hope this helps! Reply
Posted by guy nadeau on 16:10 13 Oct
Hi Melissa. I'm from Canada -- more specifically New Brunswick -- anbd I've been wondering about that tax thing ever since I have made my first affiliate commission back in 2011. I didn't make enough in my opinion since then to bother with, but eventually if I want to make a business out of this I need to look at this a little bit closer.

I try to look through the internet to my local tax department and I emailed them the question. I now wait to see if they gonna answer me and how. I asked them what forms should I fill s a reseller and an affiliate.

Do you have an idea where I should go if I don't get any answer? Reply
Posted by Melissa Johnson on 23:51 13 Oct
Talk to an accountant about it, or another qualified tax expert. They can answer your questions and often help you file the forms you need to scale your business. Reply
Posted by Ran Golan on 22:12 10 Oct
Hi
I have a company in the Netherlands
I am not a US citizen
do I need a Sales Tax ID ?
and if yes how do I do that ?

thanks in advance Reply
Posted by Melissa Johnson on 23:46 13 Oct
You only need a sales tax ID if you have an office/warehouse/official presence in the U.S. That includes importing and storing goods. If you're just selling online from overseas, you don't need to worry about it.

Reply
Posted by Melissa Johnson on 23:49 13 Oct
If you will have a presence in the U.S., you need to register in the state where you're based. Not all states collect sales tax, either. It's hard to say without more details

Your best bet is always to talk to a tax expert or accountant.
Posted by MANUEL on 23:30 9 Oct
Hello! I want to start my online business but I live in Spain, I would have to get me a license to sell in the United States? Reply
Posted by Melissa Johnson on 23:45 13 Oct
Hi, Manuel.

No license required to sell online in the U.S., but you might have to register with the Spanish government. I don't know how taxes work for businesses in Spain.

If you plan to import to the U.S. or buy wholesale and store goods in the U.S. in your own warehouse space, you'll have to register your business and pay taxes.

Hope that helps! Reply
Posted by Steve Awad on 18:12 8 Oct
Thanks for your help with everything Melissa Johnson - very helpful.

We have a business in Jersey City (an Urban Enterprise Zone that only charges 3.5% sales tax versus the NJ state wide rate of 7%) so we have a nexus in NJ. We sold $10,000 in scientific equipment to a company in Rockville, Maryland. So I simply charge the $10,000 and no additional tax? (6% tax rate in MD).

I only would charge tax if the customer is in NJ and would only have to charge 3.5% given we are in an Urban Enterprise Zone? is that correct?

Thanks! Reply
Posted by Melissa Johnson on 23:42 13 Oct
Hi, Steve --

That's a big number, and I would hate to be wrong. Was it something you sold online? in person? Did they come to your location? A lot of businesses don't tend to just make large purchases online without some discussion and back and forth.

On in-state purchases, honestly can't say because I'm not familiar with the tax laws in your area. I've never heard of urban enterprise zones, so I don't know how they would work and whether state or local tax rates take precedence.

I strongly, strongly recommend checking with an accountant or tax expert just to make sure you're in compliance and doing things correctly. =) Reply
Posted by Amanda FayHersh on 14:19 3 Oct
I had a look at the website that you directed me to and It is a way to register a business and the permits that you already have, but no information on how to get the permit that I need. I appriciate your help and patience. Reply
Posted by Melissa Johnson on 16:42 4 Oct
Hi, Amanda! I think registering your business on the site will get you the permit. But I admit, I am not familiar with Oklahoma laws at all.

https://oktap.tax.ok.gov/OkTAP/Web/_/#1

Otherwise, it appears from the link above that you can apply in person in Tulsa or Oklahoma City. The alternative is to contact an accountant or tax expert to help you figure out the next step. Reply
Posted by robert hart on 14:47 28 Sep
I am located in Canada. Must I pay tax.

Thank you
Reply
Posted by Melissa Johnson on 17:25 28 Sep
Hi, Robert!

You don't need to worry about orders placed in the U.S. if you are from Canada unless you have a stateside base of operations. However, you will be expected to pay Canadian sales tax. You can learn more about that here: http://www.canadabusiness.ca/eng/page/2651/ Reply
Posted by guy nadeau on 16:14 13 Oct
Hi Melissa.

I checked the site. But when they ask for what type of business what should I write?
Posted by Melissa Johnson on 23:27 13 Oct
Hi there, Guy!

I honestly can't tell you, because I don't know your business. I'm guessing it's probably retail? that's generally a broad term that covers lots of stuff.
Posted by Amanda FayHersh on 11:33 24 Sep
I have looked everywhere on the internet for how you would get a sales tax I.D. and a resale permit. I cannot find anything but scams. I clicked on my state in the above map, but the website for oklahoma does not have information on obtaining a packet to apply for either one of them. I would Appriciate some help. Reply
Posted by Melissa Johnson on 4:06 26 Sep
Hi, Amanda! Here is the link you need: https://oktap.tax.ok.gov/OkTAP/Web/_/#1

Hope this helps! Reply
Posted by kristin on 19:52 13 Sep
I applied for a Sellers Use Tax number about 9-10 days ago and still havent heard anything from anyone. It says it takes 3-5 days..Why is it taking so long? Reply
Posted by Melissa Johnson on 14:58 14 Sep
Hi, Kristin!

That depends on your state government. You might want to send an email to them as a follow-up. Reply
Posted by Christy on 2:29 8 Sep
Hi,

We own a small retail and ice cream shop in Wisconsin. I am going to close shop for the winter and bring my jewelry to Florida with me this winter and want to sell at Car shows and Renaissance fairs, and craft fairs. Since I own a business in Wisconsin, do I also have to have a separate license in Florida to sell down there for two months? Reply
Posted by Melissa Johnson on 14:43 9 Sep
Hi, Christy!

Since you're selling in the state to customers in the state, you will be obligated to pay tax, which means you'll need to register with Florida. The state government has a very helpful page, including a link to a tool that should help you figure out what taxes, if any, you're responsible for.

http://dor.myflorida.com/dor/businesses/outstate.html

I've worked artist tables at several events in my home state and in the next state over. In my experience, many of the events you plan to sell at will likely provide you with the sales tax forms to file taxes from those events, which should make it easier on you.

Hope this helps! Reply
Posted by Marina Nelson on 7:28 7 Sep
Thanks for the informative post. I am military spouse that just moved from Texas to Okinawa, Japan and I need a reseller/wholesale license and Tax ID number to give to the wholesalers. What state should I register my sole proprietorship with and to get the proper licenses? Reply
Posted by Melissa Johnson on 16:52 7 Sep
Hi, Marina!

Honestly, I'm not completely sure of how running a business would work for you.There aren't a lot of resources available on such a niche topic. I did find one Etsy thread that sort of touches on some of the tangential issues. It appears that above a certain amount of income you'll have to register in Japan and pay Japanese taxes. If you're planning on buying wholesale, not dropshipping, it also appears that you won't be able to use an APO address -- you'll have to get a business account with a shipping service. Here's the thread in question, although it doesn't address the issue of a sales tax ID and all that:

https://www.etsy.com/teams/7722/discussions/discuss/11782108/

Here's another post that talks a little about setting up a business:
http://blog.militarybyowner.com/bid/203629/Will-a-Home-Based-Business-Get-You-Kicked-Off-Base

Your best bet is to talk to a lawyer, tax expert, or maybe someone on base who is supposed to handle those requests.

I hope this helps somewhat -- good luck with your business! Reply
Posted by Roland on 18:44 4 Sep
Hi, I have read through all the previous comments on this page but am still unsure to what extend sales tax is a concern for overseas based persons or businesses who are operating an eCom store (i.e. on a platform like Shopify) in the US?

I understand a *US based business* has nexus in their home state and in states where they establish a 'considerable presence' (nexus), in many cases purely by using a warehouse or fulfillment service for their stock to sell to that state's residents.

I understand that the same concept is supposed to apply to the use of Amazon FBA services, whereby the FBA seller is required to collect and remit sales tax to any state where Amazon ships the business' goods out from. - (However, with this in particular, I wonder how any FBA seller would even know in advance, prior to the customer adding to cart and checking out and prior to actual fulfillment by Amazon, out of which Amazon FC the order will be shipped from - so how could this even be set up in the Amazon settings, so that the appropriate tax rate for the respective state would be charged prior to checkout?)

I understand furthermore, that you responded to the previous post to Dev (27 Aug) that you think drop shipping would not create nexus for the seller (the drop shipper's business parter). Are you sure about that? I have read conflicting information about this. However, I think it would be ridiculous to deem a drop shipper's warehouse location as nexus for the seller in a different state. The seller is not really operating the warehouse, it's not "their" goods (even though they "buy" goods on an individual basis, to be directly shipped to their customers out of the drop shipper's warehouse). It's only slightly different to an affiliate relationship, where the affiliate would send sales leads to the wholesaler, who then pays a commission and in turn sends out the same goods out of that warehouse. Still, I wonder if using a drop shipper for THEIR goods in such a business relationship definitely does not create a sales tax nexus for the seller in another state?

And most importantly, being a non-US based resident living in Australia, do any of the above three mentioned scenarios apply to me, anyway? In other words, would international eCom store or FBA merchants operating in the US, even have to register for sales tax in any of these scenarios or are they in fact exempt?

Would it be better for me to set up an LLC in the US? At the moment, I am contemplating various business ventures, as above...either bulk import and the use of an order fulfillment warehouse service, drop shipping from US merchants or Amazon FBA - or a mix of them all.

One simple example to illustrate: I could import goods from overseas and they get stored and fulfilled through a third party storage and order fulfillment service in, say California. All orders would then be shipped from California. Now normally as a California based business I understand the nexus rules, but would I even have any sales tax collection obligations in this scenario, when I am actually based overseas?

Last but not least, I have read about the 'origin-based sales tax' states vs. the 'destination-based sales tax' states ... now this is getting insane...especially the latter! And even more so if a so called 'remote seller' then has an otherwise 'origin-based sales tax' state (for businesses located there) "turned" into a 'destination-based sales tax' state!
CRAZY...How are people supposed to deal with hundreds or thousands of different tax jurisdications on multiple levels, state down to county, city..?

Thanks so much for your answers! Reply
Posted by Melissa Johnson on 17:18 7 Sep
Hi, Roland --

The tax issue is crazy complicated, I know! Each state has its own laws, cities tack on even more local laws, and then interstate commerce makes everything even more complicated. You've asked a lot of questions, and I'll do my best to answer what I can:

If you're not in the U.S., you don't need to worry about paying sales tax in the U.S. Period. You'll have to worry about registering in Australia. The good news is that many U.S. suppliers will still gladly work with you. Some wholesale suppliers might request proof of your registration in Australia, so be prepared.

If you have a warehouse in the states, or you use FBA, that becomes a nexus. (However, 2 states where Amazon has FBA centers don't collect sales tax, which means in those states, it's a moot point.) Importing is where things get very tricky, because you start having to employ agents on your behalf, you have to find space to keep the goods, etc. A lot of those activities can help create the nexus, which obligates you to pay tax. Here's another good resource about nexuses: http://www.salestaxsupport.com/sales-tax-information/sales-tax-help-questions/nexus/

Incorporating in the states will require getting a registered agent, possibly an EIN, and other steps. And then you need to maintain it every year. There's some good information about that here: http://www.mynewcompany.com/international.htm#step3

And finally, here's another resource about registering a business when you're based abroad:
http://www.salestaxsupport.com/blogs/industry/us-sales-tax-for-foreign-sellers/international-sellers-and-u-s-sales-tax-registration/

I can't advise you whether to create an LLC here in the states or not. I also can't really advise you on the tax issue. You can still sell to the U.S. market via the Internet without having a presence here in the states. That's not an issue. But if you want to get involved with a business in the states, I strongly advise talking to a lawyer or tax expert. They know way more about the issue than I ever could. =)

Hope this helps somewhat! Reply
Posted by Dev Upadhyay on 1:35 26 Aug
Hello,

We are a business establishment federally incorporated and based in Ontario, Canada and we are planning to sell various technology products in US through several online marketplaces like Amazon, eBay. It would be a drop ship model with suppliers based in US.

We would be setting up a company in US (if it helps in Delaware) and will have EIN. Can you please suggest us as to what else do we need in order to sell in all states in US and if we do not want to collect any sales taxes from our online buyers neither pay any sales tax to our suppliers (based in US).

Like I mentioned above it will be drop ship model, so we will not have a warehouse as our on-line orders will be drop shipped directly to the customers by our various US suppliers. Also we don’t need any physical office address, unless it is required by law.
Reply
Posted by Melissa Johnson on 16:05 27 Aug
Hi, Dev!

Tax laws vary by states. Delaware is one of the few that doesn't charge sales tax -- so you're not obligated to collect it on purchases made in that state, as you would be in most other places. When you sell to people in other states where you don't have a base of operations, you don't have to collect sales tax at all.

Since you're dropshipping, you most likely won't have to deal with the nexus issue for your suppliers. Delaware will be your only nexus. However, some suppliers will require you to show proof that you're a registered business -- that's your EIN. I don't know if you'll have to have a physical address listed.

I suggest you check with an accountant or another tax expert just to make sure you're absolutely doing everything correctly.

Good luck! Reply
Posted by Adam Rock on 0:18 20 Jul
Hello I live in NY and recently started selling on ebay in small amounts of my own personal items to get a feel for the market I would be involved in. I have since filed a D.B.A., received my E.I.N. and my Resale Certificate will be valid as of 8/1/2015. My question is should I be collecting taxes on the few items I sold personally on ebay. None of these were purchased from wholesale companies and I paid the sales tax on the items myself. I am confused about how to specifically define what I will be doing as a business, as opposed to any personal ebay selling which I had done previously. Reply
Posted by Melissa Johnson on 19:10 20 Jul
Hi, Adam!

Generally speaking, personal items sold on eBay won't be an issue with taxes. You're selling them for less than you paid for them, so it's technically a loss for you.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Tips-for-Online-Auction-Sellers

When you start reselling wholesale items above a certain volume, then it becomes a business. I think the federal threshold for hobby vs. business is about $600 annually (under that you don't need to report it, generally speaking) -- but you should definitely confirm with an accountant. States get a bit finicky about sales tax and every state is different.

I hope that helps! Reply
Posted by siva on 8:41 21 Jun
Hello, I followed your post and Q&A. They are informative. I have question about opening resale permit. I am on H1b working visa. Planning to apply resell certificate to resell online(ebay,amazon) buying from wholesalers. Am I eligible to apply for resale certificate? I am on the process of my Green Card(GC). What kind of entity I can form. Do I need to have some GC holder should be partnered? Please advise. Reply
Posted by Melissa Johnson on 14:31 22 Jun
Hi, Siva --

It looks like you would not be eligible to apply for a resale certificate since you would not be able to work the company you created with an H1-B visa. The most it appears you can do is be a passive investor -- put money in and let someone else make the operational decisions.

I don't know how obtaining your green card would change that. I highly suggest talking to an expert in taxes and immigration to find out when you'd be eligible to create your business and what your limitations are.

Hope that helps! Reply
Posted by Ryan on 21:29 19 Jun
Hello

I have a business in Delaware, how do I get a resale tax certificate?

Regards Reply
Posted by Melissa Johnson on 14:24 22 Jun
Hi, Ryan -

Delaware does not charge a sales tax, so there's no need for a resale tax certificate. Instead, you should be able to provide proof of your business's registration in Delaware to wholesalers and they should accept that.

http://revenue.delaware.gov/services/Business_Tax/Exemptions.shtml

Hope that helps! Reply
Posted by Lacey on 7:44 18 Jun
I'm a military spouse living overseas (Okinawa, Japan) and would like to purchase wholesale fabric both to sell & sell products made from the fabric. What do I need to do? Reply
Posted by Melissa Johnson on 15:15 19 Jun
Hi, Lacey --

I'm honestly not fully sure. I recommend talking to a legal/tax expert about it. If you're living on a base, you're technically still living and working on U.S. soil, so you should be able to set up your business and register it in the states, then use that registration to purchase wholesale fabric without having to pay sales tax. However, I'm not sure of the exact process for you.

Hope that helps! Reply
Posted by Nancy on 16:42 9 Jun
Hi,

I am located in miami florida and am going to start an online dropshipping business with different companies that I have found on salehoo. I just applied for an EIN and received it through http://www.irs.gov/. I am wondering if I need to get any other things done, such as applying for any other tax documents or things of that nature, in order to be legally eligible to do the business.


Thanks Reply
Posted by Melissa Johnson on 15:59 11 Jun
Hi, Nancy --

You'll also need to register your business in Florida: http://www.stateofflorida.com/corporations.aspx
And plan on paying sales tax! It's definitely a good idea to talk to an accountant to make sure you're all squared away there.

Hope this helps! Reply
Posted by Tyler Silver on 16:51 24 May
I am located in New York and I want to sell goods with my partner in Africa who has buyers, (both large and small orders), For some items, I would purchase them from an outlet store, lets say in NY or NJ, order other items online, and order it to my shipping forwarding company that is based in Delaware that would forward it to Africa. When I make that order from online or in store, although I am physically in NY/NJ they don't charge tax because the place it is going is in Delaware where there is no Sales Tax. How would I go about taxes with these items? Do I need a resale license? I don't have an LLC yet but plan on setting one up this month where it makes the most sense. If my buyer needs to pay taxes on these, where can I find out how much they would be.

Thanks Reply
Posted by Melissa Johnson on 14:43 27 May
This is tricky.

If you're selling things actually in the States, you need to worry about collecting sales tax and paying it to the state. But it doesn't sound like that's the case -- you're selling in Africa, which means you're subject to both customs and whatever tax laws are in place in the countries where you sell.

That said, since you're in New York, you should register your business there (you technically have a nexus there, since it's where you live and operation) to get your sales tax exemption.

If you're stuck or unsure of what to do, I recommend talking to either an authority on experts or an accountant/attorney versed in this kind of tax law. That's really the best way to make sure you're in compliance and doing everything correctly.

Hope that helps! Here are a couple other links that might be of assistance:

http://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/exemption_certificates_for_sales_tax.htm
http://www.salestaxsupport.com/sales-tax-information/question/sales-tax-exemptions-on-export-sales/ Reply
Posted by Theresa Grethe on 8:17 14 May
Where can I go to get started buying wholesale and selling retail on Internet and in a store in an Y State ? This article was somewhat helpful .thank you . Reply
Posted by Melissa Johnson on 16:46 15 May
Hi, Theresa!

You'll need to find a wholesale supplier and set up an online store. If you're wanting to sell in a brick and mortar location, you'll have to get premises and all the trappings that come with a brick and mortar location -- and of course you'll need a solid plan for how you want to run your business.

To find wholesalers, I recommend signing up for our directory -- you get access to more than 8,000 suppliers. You can also create an online store with SaleHoo stores, but there are other options as well, including Amazon and eBay, of course!

http://www.salehoo.com/directory
http://www.salehoo.com/stores

Good luck! Reply
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