Buying wholesale is not a right, but a privilege you get only by paying for. Think of buying wholesale as a kind of taxed activity, sort of like a fishing license. The license enables you to buy goods for resale to retailers without paying a sales tax. So, how do you get a wholesale license? As is the case for so many types of regulation, the specifics vary among states. But in general, you need to register your business and get an EIN, apply for a sales-tax license, and then sometimes get an additional wholesale license from your state's taxing authority.
How to Get a Wholesale License
If you want to buy things wholesale, then make money by selling them to retailers, you need a wholesale license from your state. This enables you to buy merchandise tax free for your wholesale business. The exact hoops you have to jump through to get this depend on your state. Many states require more or less the same procedure, but you'll need to make sure you know your own state's requirements.
In Pennsylvania, you get a wholesale license only if you sell to retailers, not if you sell to the end consumer. (Those businesses also selling to consumers will need a sales tax license instead.) If you want either, you first must register the business by filing a Pennsylvania Business Registration Form (PA-100), either online or on paper. It is easiest and fastest online, since the form guides you in providing the information required. You will need to register your business first and obtain a federal tax ID number (called an EIN) from the IRS before you apply. This is accomplished online, by phone, fax or mail. The state application form requires you to identify yourself and describe your business. The wholesale license in Pennsylvania is $500.
In Florida, the process is very similar. You first get an EIN from the IRS. With the EIN in hand, register your wholesale business with the state by visiting the website of the Florida Department of Business and Professional Regulation. The website will walk you through the form you need for your particular business. As a wholesaler, you will need a Florida Sales Tax Certificate Number, also known as a Florida Resale Certificate or Florida Sellers Permit. The city or county where you open your business may require a business license or other licenses, which are separate from state-issued seller and use-tax permits.
What Is a Resale License Number?
In general, sales tax is imposed on a sale only on the end user of a product. With a resale license, you can purchase items without paying sales tax because your intention is to resell them to an end user. With a resale license, you are usually required to collect sales taxes from your customers and then send the money to the government. Wholesalers usually sell only to retailers who hold a resale license. In some states, they are called other names, like Sales Tax License (in Pennsylvania) or Sales and Use Tax Permit (in Texas.)
To get a wholesale license, you need to register your business and get a federal tax identification number, a sales-tax license from your state taxing authority and then, in some states, apply for a wholesale license from your state's tax or revenue office.
- Filings USA: Wholesale License
- How Stuff Worlks: How to Get a Wholesale License
- Reference: How to Obtain a Wholesale License in New York
- Pennsylvania Revenue: Distinction between Wholesaler's Certificate and Sales Tax License
- Pennsylvania Revenue: Application for a Sales Tax License, Promoters License, or Wholesalers Certificate.
- State Tax Certificates: Florida
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.