Resellers License

Before you begin selling anything online you must know that in the United States they require the certification/license. In US, reseller license is mandatory for retailers and wholesalers for the online or in ground stores. Through this license, you can also purchase the raw products for manufacturing your own products. For example if you are looking to launch an online boutique then you will require the reseller license for buying the fabric and related accessories.

What to Avoid?

Generally in any guide, this part is given at the end but I think it should be given right at the top so that you can learn about the importance of this part. The things to avoid are as follows:

  1. Avoid using the license for buying household or personal items.
  2. The license is not for buying presents and gifts.
  3. Any item which is used in business activity (not for resale) should be avoided.
  4. You are only allowed to buy technical tools and equipment if you are reselling them.
  5. Rental equipment.

Different states have different laws. Violation of the law can result in cancelation of the license and you might have to pay hefty fines. Therefore it is strongly recommended to use your license rightly and don’t cross limits.

How to Get a Reseller License

  1. You need to apply for the license with the sales and taxation department of your state. For example if you are running a New York based business then you will apply to the New York state department of taxation and finance.
  2. You will receive the reseller license form. The necessary information/instructions are attached to the form. All the legal requirements are also attached with the application form. The sample forms are attached at the end of this post. Most of the states provide reseller license for not more than $50. If you don’t have a reseller account then you are required to give sales tax on each product.
  3. You can also register online to get a license.
  4. The state’s department verifies that the information given in the form is correct and you are dealing with the tangible property.
  5. It is advised that you should visit the office of the concerned state department. You can search for the addresses of the concerned stat departments online.
  6. Till 2009 the reseller license was valid for four years but now it remains valid for two years.

By getting the reseller license you can avoid the hectic process of paying the sales tax for the business. Links to sample applications are stated below:

http://www.tax.ny.gov/pdf/current_forms/st/st120_fill_in.pdf

www.state.nj.us/treasury/taxation/pdf/other_forms/sales/st3.pdf

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