Successful Online Selling
 

Why And How to Get A State Sales Tax Number

why and how to get a tax numberMany sellers on eBay and other e-commerce sites wonder why they should get a sales tax number. Since sales tax is charged on products sold within a particular state, they may have a point. if you purchase used products at garage sales and run a few auction a week, then you shouldn’t get so concerned about sales tax.

However, you should probably get a sales tax number if you run many auctions per week.

There are three main reasons why a seller needs to get a sales tax number (also known as a Resale Certificate).

1. It is Stipulated by Law

If you’re a seller on eBay or any other e-commerce sit and sell a product to someone in the same state as you’re in, then you are required to charge the buyer sales tax that is due to your state. However, if your annual sales do not exceed $4 million (which is the majority of sellers), then you are not required to pay sales tax on products shipped to an out of state address.

For instance, if you live in Arizona and you sell an item to a person living in Arizona, or someone in another state that requests you to ship the item to an address in Arizona, then you’ll be required to pay sales tax to the state of Arizona.

Therefore endeavor to collect this tax on your sales. If you sell the same item to someone in California, you don’t have to concern yourself with sales tax.

2. You can buy products and don’t pay sales tax on them

paying taxes for online businessesWhen you have a sales tax number and purchase an item you’re going to resell, you don’t have to pay sales tax on its purchase. It strictly has to be purchased for resale.

For instance, if you bought a new computer for use in your home office, you would be required to pay sales tax. But if you find a cheap computer somewhere and want to sell it on eBay, you don’t have to pay sales tax.

3. Majority of wholesale companies require you to have a resale certificate

Nearly all legitimate wholesale companies will request you for a copy of your sales tax certificate prior to selling any goods to you at wholesale prices. Apart from wholesalers, you would also need a sales tax certificate to open a checking account for commercial purposes in most states.

You realize that most wholesale trade fairs and merchandise marts would need you to present a copy of your resale certificate before you’re admitted.

Some states do not charge sales tax but they still issue some form of Business License, which serves the same purpose as a resale certificate when dealing with wholesalers.

It’s very easy and cheap to get a sales tax number. Simply visit the official government website of your respective state and go to the tax and revenue page. For some states, you can apply directly online while for others, you will have to download and complete the forms and then mail them in.

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