Tax can be a messy business, because the rates and rules change depending on where you live, the place(s) you operate business from, and where your customers are. This post will help you to navigate the rules for you personally.
Do I Need a Tax ID to Deal With Wholesalers? Where do I go to get one?
Although it's not necessary for SaleHoo members to have a seller's permit and a registered business for them to use many of the suppliers in our directory, we strongly recommend you get one as it will give you access to even MORE wholesalers.
Link hidden: Login to view.
Do I Need a Sales Tax ID if I'm Not a US Citizen?
In some cases you may not even require a tax ID if you aren't a US resident. If they do still require one, then usually you just need to provide something equivalent in your country, for example your VAT registration in the EU or the UK, or your ABN or GST registration in Australia and New Zealand. It has to be a business related tax id to prove you are a registered business.
When to Charge Buyers With Sales Tax
1. You charge buyers with sales tax only if they’re in the same state as where you’re selling from. For example, if your business is operating in Illinois (regardless of whether you’re dropping from an international supplier), then you will charge your buyers from Illinois with sales tax. If your buyer is located outside the state of Illinois, then you waive any sales tax charges.
2. You can charge customers with sales tax ONLY if you have a sales tax ID. It's illegal to charge buyers with sales tax when you haven’t acquired your ID yet.
3. If your business is getting serious, as in not just selling the odd thing every now and then from around the house, and you don't have a sales tax ID and collect sales tax, you could run into trouble with tax audits. So if you're buying and selling wholesale or dropship, be sure to Link hidden: Login to view and charge sales tax when it applies.
The sales tax you collect has to be filed come tax season as this will be used to help fund government facilities i.e. National parks, public libraries, etc...
How to Get Tax Advice Specific to Me?
To figure this out, list the states that you:
- Live in
- Operate a business from (e.g. You have a warehouse in/your products are coming from)
Once you know these, look up the specific tax rules for each of these states. Just Google your state tax department, e.g. "Washington State Tax Department" to find the website and look around.
If the information is confusing, find their contact email and ask what your specific tax obligations are, giving them details of the state you live in and other states your business is operating from. This is the best way to get advice specific to you.
Getting Started After Acquiring Sales Tax ID
When you have a tax ID, it won't be difficult to find a supplier to work with. You will be able to choose dropship or wholesale. You can go straight to eBay and list your items there for sale if you want, you just need an eBay ID. Or you can Link hidden: Login to view. Just make sure you are aware of any fees that are involved wherever you sell, both up front and on sale fees that will impact your margin.