A Sales Tax License goes by many names, such as a Reseller’s License or Vendor’s License, depending on the state you operate your business. No matter the state, the license is needed for businesses to collect state sales tax and any state-collected county to collect and distribute taxes back to local government. Each state has their own set of requirements, guidelines, and application process for businesses to obtain a Sales Tax License.
Who Needs a Sales Tax Permit?
Although each state may have different requirements, generally, businesses that conduct retail sales or wholesales regularly will need a Standard Sales Tax License. This includes individuals, corporations, partnerships, and limited liability corporations. In addition, businesses that have an office, sales room, warehouse, or place of business within a specific state will need to apply for the seller’s license. In some cases, if a business has sales representatives or agents working in a specific state, as well as those receiving rental payments for the lease of properties in a state, that business may need a license.
There are different types of Sales Tax Licenses that may be needed depending on the nature of the business. In addition to the standard license, there are also Wholesale, Special Event, Except Certificates, Exempt License for Contractors, and Small Home Businesses Sales Tax Licenses. Your local issuing agency will help you determine which type of license you need.
Applying for a Sales Tax License
Most applications for a Sales Tax License can be conducted online or by visiting the local office that handles these matters. General information needed during the application process will include:
- Social security
number and date of birth.
- Drivers license number.
- Federal Employer Identification Number.
- State Employer Identification Number.
- Corporate name, number, and state and date incorporated.
- Name, address, and phone numbers of corporate offices, partners, or business members.
- Names and phone numbers for personal reference.
- Names and addresses for suppliers.
- North American Industry Classification System Code.
- Standard Industrial Classification.
- Banking information.
- Name and account number for merchant credit card processor.
- Names, address, and phone number for accountants or book and record keeper.
- Anticipated average monthly sales and the amount of taxable.
- Additional information requested.
Upon submitting your application for review, some permits are issued the same day, while others may take a short period of time depending on the state. Upon receiving your permit, it will remain valid as long as you are actively in business.
Responsibilities as a Sale Tax License Holder
By having a Sales Tax License, you are now responsible for the proper use of that license. To ensure it’s used properly, you may be subject to an audit to determine if the correct amount of taxes are paid. So, it’s important to keep proper records and report and pay the sales and use taxes. In addition, you must notify the issuing agency of any changes to address, ownership, or partners involved with your business, as well as if you sell or purchase a business to remain compliant.
As long as you abide by the regulations set in place for a particular state, your application process will be simple to allow you to begin conducting business.