I run an online store and buy products wholesale to resell. Do I need a resale certificate, and how does it work across different states?

A resale certificate allows businesses to purchase goods intended for resale without paying sales tax at the time of purchase. Often referred to as a reseller’s permit, it serves as your sales tax license and is issued by your state’s tax authority.
How Does a Resale Certificate Work?
1. Tax Exemption at Purchase:
When you provide a resale certificate to a seller, it exempts your business from paying sales tax on items you intend to resell.
2. Passing the Tax to the Consumer:
Instead of paying sales tax upfront, your business collects the sales tax from the end consumer when the goods are sold.
Why Is a Resale Certificate Important?
Avoid Double Taxation:
It ensures that sales tax is collected only once—from the end consumer—rather than being paid by the business and the customer.
Mandatory for Resale Businesses:
Retailers, wholesalers, and e-commerce sellers need a resale certificate to operate legally and manage tax responsibilities.
How to Obtain a Resale Certificate:
To get a resale certificate, you typically need to:
- Register for a sales tax permit in your state.
- Provide required business details, such as your tax ID and business registration information.
For step-by-step guidance, check out:
- US Resale Certificate: Business Necessity for Retailers.
- California Resale Certificate for U.S. Business.
Need Assistance?
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