Tax questions

Hi,
I am a new member from New York. I recently got an EIN, which is easy to do. Is that just as good as a resale certificate, or do I need to get that too? My next question is if I sell online to someone in a different state, do I charge them tax and how would I find out how much to charge?

Thanks

Hi JmillNY,

Welcome to SaleHoo!

An EIN number (also known as a Federal Tax Identification Number, TIN) is a number used in the USA to identify business entities. This is a free service offered by the Internal Revenue Service, and most businesses in the US are required to get an EIN when they register and/or start hiring employees. This EIN is for federal tax purposes, which is why it is issued by the IRS.

EIN is different from the Resellers Certificate.

The Reseller Certificate is issued by your state and is for state tax, for reporting and documentation purposes. This is also called the sales tax Id , Retail or Reseller's License, State Sales Tax Id, Tax Id, Resale Number, Resale Certificate, or Vendor's License. Sales tax is charged on the sale of most services and goods, in most states in the US and Canada, (therefore applicable to US and Canada only). Your sales tax number identifies you to the government and is required by some wholesalers as proof that you have a retail business, because it allows you to pass on the sales tax onto your buyers.

So essentially, the reseller's permit is used to be able to buy at wholesale, without having to pay taxes to the wholesale supplier. You as a reseller will then have to collect taxes from the buyers of the merchandise, and need to remit it to the government. Without a sales tax ID, you will need to pay sales tax to the wholesaler on top of the cost of the merchandise. And in this case you will then have to add the sales tax you paid, as a deduction on your return. It is much less complicated then if you can just present your reseller license when you buy. :)

You can usually get your Reseller license from your State’s website – just Google ‘Your State + sales tax’. In New York, you may go to Link hidden: Login to view the New York State Department of Taxation and Finance (either online, by phone or in person) and fill in the appropriate form. Once you get your sales tax ID, the state will start sending you monthly/quarterly statements.

This sales tax is charged on all sales of physical goods to buyers within your state. And in general, you do not need to collect sales tax from buyers who live outside your state.

To learn more, please refer to Link hidden: Login to view

Cheers! :)

Hi Irene,
Thank you for answering right away. This information is very helpful. :)

You are most welcome JmillNY :) Let us know if there is anything else we can do to assist you.