DOES MY BUSINESS NEED A SELLER’S PERMIT?
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A seller’s permit is usually one of the primary permits and licenses that a business applies for. Any business dealing with the sale or lease of products or services needs to apply for this permit before they can legally carry out their activities. Businesses are expected to apply with their state’s authority for their seller’s permit. This permit is often confused with a resale certificate. While the two are used interchangeably, it’s best to remember that the two are quite different. Before we get into the details of how they are different and whether your business needs these permits or not, let’s get the basics of a seller’s permit down.
What is a Seller’s Permit? A seller’s permit allows you, a seller or service provider, to collect sales tax via the sale of product or services made to the customer. This tax is later remitted to the state’s Department of Revenue. Every state has its own seller’s permit and thus the requirement of getting one also depends on the state you live in or have set your business in. Since the permit is state specific, you might have to get multiple seller’s permits for every state where you conduct your business.
Along with a seller’s permit, a business entity is also issued a resale certificate. This certificate comes in handy when a business buys a product or leases one with the purpose of reselling it further. In such a case, businesses do not have to pay sales tax on the product or service bought or leased. Instead, the sales tax is collected from the final consumer and remitted to the state’s revenue department by the business. To apply for a seller’s permit, you can visit your state’s website of the Department of Revenue and find details as to whether your business requires this license or not. The state will require you to fill out an application and provide some documentation for approval. Since the process can get a little complicated and Hassel some, you can ask professional service providers like EZDocfiling to help file all the required documents.
What Type of Businesses Need a Seller’s Permit? Whether you need a seller’s permit or not comes down to the type of business you’ve set up. If you’re involved in the sales and lease of tangible goods, you’re probably required to apply for a seller’s permit. This license acts as a trust tax, where the retailer/service provider collects tax to be paid to the state from the consumer, keeps it safe and then remits it to the state quarterly. Most states also require businesses that provide services to indulge in getting a seller’s permit as well. It is recommended that you check out your state’s specifications when starting a business. Your inability to file for a seller’s permit in a state that strictly requires one can end in penalties.
Whether you need a seller’s permit or not comes down to the type of business you’ve set up. If you’re involved in the sales and lease of tangible goods, you’re probably required to apply for a seller’s permit. This license acts as a trust tax, where the retailer/service provider collects tax to be paid to the state from the consumer, keeps it safe and then remits it to the state quarterly. Most states also require businesses that provide services to indulge in getting a seller’s permit as well. It is recommended that you check out your state’s specifications when starting a business. Your inability to file for a seller’s permit in a state that strictly requires one can end in penalties.
Here are some types of businesses that are required to get the permit: Businesses dealing in the sale or lease of tangible goods. These could be wholesalers or retailers. This type of business comes first and at the top of the list of businesses required to apply for this permit. Some states also require service providers like attorneys, architects, consultants and more to apply for a seller’s permit. The businesses that are indulging in seasonal sales or temporary businesses are required to apply for a temporary seller’s permit. These temporary permits are also state specific and thus you must learn about your state laws before starting your business. These can include garage sales, Christmas tree lots, firework booths and more. The temporary businesses aren’t expected to last longer than 90 days at a particular place.
Does My Business Require a Seller’s Permit? As a business entity, especially a new one, navigating your way through business licenses and permits can be a little difficult. Since every state has the right to have particular requirements for businesses, you are obligated to follow through. This means that while some states might not require you to apply for a seller’s permit, others might. If you’re conducting business in multiple states, this one can be tricky to work around. It is thus necessary that you get all the state specified licenses for your business in every state you operate. Do You Require a Seller’s Permit for Your E-Commerce Store? In today’s era, your business no longer requires a physical presence to thrive. With businesses selling online, however, some confusion ensues. Should I get a seller’s permit for my online store?
Not necessarily. As an online business, you must apply for a seller’s permit if you have a physical presence in the state. Therefore, for every state where you might have a registered location, you must also comply with the rules of the state. In some states, a remote seller has to apply for a seller’s permit only after achieving a certain threshold of sales and total transactions. Others might base it on the gross sales, gross revenue, retail or taxable sales. Some of these states necessitate the need for a permit only after the business passes the threshold of $100,000 or 200 transactions within the state. (If you have physical presence in a state, you are not deemed a remote seller and must apply for a seller’s permit as per the state provisions.) Note: States like Alaska, Delaware, Montana, New Hampshire and Oregon have no rules for the collection of state sales tax. Which means that for businesses operating in these states, you aren’t obligated to apply for a seller’s permit. Apply for a Seller’s Permit in Three Easy Steps If you’ve envisioned a business, wholesale or retail, that deals in the sale or lease of taxable tangible personal properties or taxable services, you must apply for a sellers permit.
While applying with the state directly is one way to go about it, any error in the filing process can lead to serious drawbacks and consequences. Instead, you can register with professional service providers like EZDocfiling that can take care of the process for you. Here’s how the process goes: Research Professionals at EZDocfiling will do the research for you, so you don’t get caught up in the hassle. From finding the right type of permit for your business and the basic information required by the state, we’ll find it all for you. Help You File After the research is done, we’ll file your application for you while you focus on other important tasks. Get Your Permit Without any hassle on your part, we’ll apply for your application and get everything sorted, providing you with your seller’s permit at the end of the process. For more information about applying for your seller’s permit, read this.