Does your business buy tangible property and then resell it? If so, your purchase from the supplier is considered a resale and is not subject use or sales tax. In order to partake in item resale, you must apply for a resale license as well as a resale certificate to avoid potential tax and other financial issues. Keep reading to learn about applying for a California resale license, as well as the importance of this certificate.
A resale certificate isn’t the same as a resale license. A resale license enables you to do business in the state, while a resale certificate indicates that you’ve purchased property that will be resold. When drafting a resale certificate, be sure to include:
- Your CA sales tax license number
- Name and address
- Description of items purchased
- Resale statement
- Purchase date
Be sure to maintain a copy of the resale certificate for your records in the event of questions from the state or IRS in regard to taxes.
It’s important to only use a resale certificate in CA if the property you’ve purchased will be resold. Using this certificate to bypass tax laws isn’t legal, and it still leaves you liable for the required tax payments, as well as any interest on the tax due.
Importance of Resale License
Without a resale permit, your company cannot legally conduct business. Permits are required by any business that will sell tangible property that is subject to state sale’s tax. Wholesalers, retailers, and mom and pop stores must all have the proper permit. Doing business without a permit could result in serious legal and financial trouble.
How to Apply
Before obtaining a resale license CA, you must first register your business in the state. Once you have registered your company, you can obtain a federal employer identification number through the IRS by filling out Form SS-4. This number is needed in order to apply for a resale license, also known as a seller’s permit.
To apply for a seller’s permit, you will need to provide a variety of business information, including your name, business address, number of employers, and the type of items that are sold to the California State Board of Equalization. The board will process your information and will provide a permit to you so that you can start selling items.
Your Source for Resale Permits in CA
Applying for a resale permit can be time-consuming. Want to start selling items without the hassle of filling out paperwork? If so, our online resale permit application tool is exactly what you need. Using this tool, you provide the necessary business information, and we do the hard work of submitting the data to the state for you. This gives you more time to spend on writing a business plan or drafting a marketing campaign.