Anyone who plans on selling goods to customers must have a permit or license to do so. A California seller is required to have a seller’s permit, and this is true in most other states, as well. The reason for having a seller’s permit, also called a wholesale/retail license or a sales & use permit, is so sellers can collect sales tax directly for items sold in a self-run business.
In California, if you make three or more sales in a 12-month period, you must obtain a California seller’s permit. This is true even if the sales were made using a platform like Craigslist or eBay.
Those affected by the California law that resellers must have a permit include:
- Limited Liability Companies (LLCs)
- Limited Liability Partnerships (LLPs)
- Limited Partnerships
- Married Co-Ownerships
- Registered Domestic Partnerships
What Is Sales Tax?
Sales tax is added on to the cost of most goods. It is a form of tax collected by the state for the sales of certain products. Without a resale certificate, you will have to pay sales tax for items you buy that you intend to sell later.
Seller’s Permit vs. Resale Certificate
Although similar, these terms are not interchangeable because they refer to different things. A seller’s permit, which is issued by The California State Board of Equalization, is necessary to make sales in California. The important distinction is that a seller’s permit is not a buying permit. Instead, you’ll need a resale certificate in order to buy your items tax-free.
Many who sell goods first buy the items from a wholesaler and mark the items up to resell them. For this reason, it is also useful to have a resale certificate. Sometimes called a resale license, this allows retailers or wholesalers to avoid paying sales tax when purchasing items according to the California State Board of Equalization. This, of course, makes it a huge incentive for vendors to get a resale license in California.
The reason that the individual with the resale license doesn’t need to pay taxes is that it is, instead, paid by the seller’s customers when they buy a product or products. You need a resale certificate to collect sales tax, and this is true for sellers for the state they are based in, as well as for every state where they ship any of their inventory.
How Do I Get a Seller’s Permit and Resale Certificate?
Through FastFilings.com you can easily get a seller’s permit, much more quickly than doing it yourself. This will allow you to start selling your products or goods and making more money faster than if you didn’t have one (and, remember, it’s required).
Obtain your resale license quickly and easily through FastFilings.com. We supply the information you provide to the California Board of Equalization and expedite the delivery. To get started, please contact us today.