Resale Numbers and How to Obtain One

2008-03-11 11:43:46

( Real Estate )



Resale License - A Must in Merchandising and Sales

Just as opening a business requires a business permit, engaging in merchandise sales also needs a resale permit. A resale license or permit is an authority given by the state to your company to resell goods that you have acquired or purchased from manufacturers or wholesalers.

Each resale license also has a unique resale number. In most cases, your merchandise suppliers will only need to know your resale number, as they have the means to verify your license.

Most states require you to have a resale number for the purpose of collecting sales taxes from you. When you engage in reselling, you are supposed to charge your customers the appropriate amount of sales taxes depending on where you are selling the merchandise.

Benefits of a Resale Number and License

Your resale number and license or permit indicates that you are a bona fide business entity that companies can safely deal with as part of their supply chains. Many suppliers and manufacturers will not even deal with you if you cannot present a resale number.

The resale number tells your suppliers that you are not the final user of the product, and therefore you should be entitled to merchandise discounts or special wholesale prices. With a resale number, you are exempt from having to pay sales taxes to the suppliers, since you will be charging the sales taxes to your customers.

Obtaining a Resale License and Number

You can download an application form for a resale license from the website of the state you are doing business in.

You need to submit this application along with other documents and information pertaining to your business. You also need to present copies of your social security number, driver's license and bank account details.

If your requirements are complete, you may be able to get the license within one to two weeks from the date of application. There is no charge for obtaining a resale permit, but you may be asked for a security deposit or other documents depending on the merchandise you are selling, such as in the case of a timeshares resale license.

Obligations of Resale Licensees

As a holder of a resale license, it's your responsibility to learn and understand how to apply local and state sales taxes for your sales transactions. You may be able to do this with the help of resell software or by consulting state tax authorities through their websites or by mail.

You should also collect sales taxes from all your customers and in turn, submit these properly to your state.

The resale license is a privilege which you should exercise properly and not abuse. You are liable for any penalties from failure to comply with the state's sales tax requirements.


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