An Illinois wholesale license is required for any business that operates or conducts business in the state and sells goods and services. A wholesale license is also referred to as an Illinois resale certificate.
Does My Business Need an Illinois Sales Tax Permit?
Illinois requires all businesses selling tangible goods and services, whether they are a sole proprietorship, partnership, LLC, or corporation, to obtain a seller’s permit. Without one, you cannot legally operate a business in Illinois.
Does My Business Need an Illinois Wholesale License?
Illinois businesses are not required to obtain a wholesale license if they do not want one, although there are benefits your Illinois business gains by obtaining a wholesale license, including:
- Qualify for Sales Tax Exemptions – Any goods or merchandise you purchase from suppliers and vendors can be purchased tax-free with your seller’s permit. When you sell the products to your customers, you collect the sales taxes and submit those to the Illinois Department of Revenue.
- Qualify for Wholesale Discount Pricing – Many vendors and suppliers will sell you their merchandise at wholesale prices when you have a wholesale license in Illinois. This allows your business to buy at a discount and earn higher profits on the goods sold at retail prices.
What Documentation Is Required to Get a Seller’s Permit in Illinois?
You will need to obtain all relevant documentation relating to your business before you can apply for an Illinois wholesaler license. You will need your social security number, fictitious business name registration (DBA), employer identification number (EIN), personal references, business registration information, bank account information, and email address.
Steps to Obtain an Illinois Wholesale License
Step 1: Decide on a Business Structure
When starting a business in Illinois, you need to decide if you want to operate as a sole proprietorship, partnership, LLC, or corporation.
Step 2: Register Your Business
You will need to register your business with the state of Illinois to obtain a business license. The business license should reflect your business name or DBA name.
Step 3: Apply for Your EIN
You will need to apply through the IRS to obtain your employer identification number (EIN). The EIN is used to collect federal income tax for your employees, as well as to pay federal business taxes when filing annual tax returns.
Step 4: Apply for a State Sales Tax Permit
An Illinois state sales tax permit is also referred to as an Illinois seller’s permit. You will need a seller’s permit to sell goods and services in Illinois. You can register for a sales tax number at the same time as registering for a wholesale license.
Step 5: Register for an Illinois Wholesale License
There are two different options for obtaining your wholesale license in Illinois. You could attempt to navigate through the Illinois Department of Revenue’s forms to find the ones you need. This can be rather time-consuming to know which forms you need to fill out and submit.
A better option is to use a third-party service, like FastFilings.com, that knows exactly what forms your business will need to complete to obtain your seller’s permit. Using our service ensures your application is completed correctly and accurately.
Additionally, you will not have to worry about delays, potential rejections for incomplete or inaccurate applications, or other such issues. In most cases, we can help you obtain your wholesale license within a day or less. Furthermore, we can help you apply for your state sales tax permit at the same time.
Is There a Difference Between a Wholesale License and Sales and Use Tax License?
Many people frequently are confused since there are several different terms used interchangeably. Your wholesale license allows you to buy goods and merchandise at wholesale prices and be exempt from paying state sales taxes.
A sales and use tax license is required to sell goods and services in Illinois. Without it, you cannot legally conduct business in the state. We understand that the terminology can be very confusing.
The main thing to remember is that you need to register for a sales tax license to obtain a sales tax number for collecting sales taxes AND you need to register for a wholesale license if you want tax-exempt status and wholesale discounts.
Does a Wholesale License in Illinois Expire?
Wholesale licenses in Illinois do not expire. However, the state does recommend that business owners review and update their business information every two to three years to ensure it is accurate.
Does a Seller’s Permit in Illinois Expire?
Seller’s permits remain active when used regularly. If they are not used for an extended period of time, the state can cancel them. Before you can resume selling products and services in Illinois, you will need to reapply to reactive your seller’s permit.
What if My Vendor Refuses to Accept My Illinois Wholesale License?
Illinois-based vendors and suppliers are not required to accept wholesale licenses. They can still collect sales taxes on the merchandise you purchase from them. If they do, keep accurate records, as you can qualify for a sales tax credit when submitting your sales taxes to the Illinois Department of Revenue.
If your vendor or supplier is out-of-state, you will need to register for a resale certificate in the seller’s state. Before you do, check with the vendor or supplier to see if they will accept a resale certificate issued by their state for sales tax exemption.
Do I Have to Pay Taxes if I Have a Resale Certificate from Another State?
Illinois does not recognize resale certificates from other states. If you want to purchase merchandise at wholesale prices and avoid paying sales taxes, you will need to apply for an Illinois wholesale license.
Get Your Illinois Wholesale License and Seller’s Permit Today
If you are ready to start a business in Illinois, or want to take advantage of wholesale prices and tax exemptions, and want to avoid the confusion of knowing what government agency you need to apply to, fill out your application at FastFilings today! We make the process easy so you can have your wholesale license and seller’s permit quickly.