There are three reasons for having a sales
tax ID number (also called a Resale certificate or Resale Number)
1. It's the law. If you sell goods on eBay
or the internet and ship them to someone in your same state, then you
have to collect (charge the buyer) sales tax and pay that tax to your
state. However, if you sell less than $4 million in annual sales, then
you do not have to collect or pay sales tax on sales where you deliver
the goods to an out-of-state address. For example, if you live in
Virginia and you sell something to someone else in Virginia or to
someone out-of-state that asks you to ship it to someone in Virginia,
then you need to collect and pay sales tax to the State of VA. But, if
you sell the same item to someone in Florida, you can forget all about
the tax. The only exception to this law is if you are selling used
goods.
2. You can purchase items without
paying sales tax on them. When you buy something that you plan to
resell, you can purchase it without paying sales tax. But it must be for
resale. For example you can not buy a new computer to use in your office
and not legally pay sales tax.
3. Wholesale companies require a sales
tax certificate . Legitimate wholesale companies will ask for a copy of
your resale certificate before they will sell to you at wholesale
prices. Besides wholesale companies, in most states you need it to open
a commercial checking account. Every wholesale trade show and
merchandise mart requires a copy before letting you in.
If your state does not charge sales
tax, (Oregon and Idaho for example) then it will probably issue some
type of Business License that will serve the same purpose for wholesale
companies.
Getting a sales tax number is very
easy, you just need to contact your State Dept of Revenue and inquire.
WholesaleKid.com sells only business to
business for the purpose of resale - thus we are required by law to have
Sales Tax ID on file for all of our wholesale customers.
