If you are a wholesaler and want to start a small retail business, check your state requirements to see if you need to get a wholesale license. There may be different names in different states, but the purpose is to allow you as a wholesaler to purchase goods in bulk from manufacturers without having to pay tax. It also legitimizes the reselling of wholesale items.
Employer Identification Number: The first step inis to apply for an Employer Identification Number (EIN) with the IRS. This is important if this is a new business venture. This is a necessary step and allows you to get other licenses you may need for your business operation. You will need to provide information about yourself and your business. You can apply online, and the application process will usually take about two weeks.
Sales Tax License: You will also need a sales tax license from the appropriate authority in your state. This means you also need to apply for a state tax ID number. This will allow you to charge taxes to the products’ buyers, pay your employees, and pay state taxes.
Apply for the Wholesale License: You can contact your state’s revenue or tax office to apply for your wholesale license. Application fees can differ, depending on where you are applying. In California, a wholesale license can also be known as a seller’s permit, and you get it with the Board of Equalization. You don’t need to pay a fee for getting the license, but you could be required to pay a security deposit if your business closes. The Board will determine what the deposit will be at the time of your application. Be sure to fill out your application completely with the information that is required. Any missing information in your application can delay getting your license and a delay in your business.
Benefits of a Wholesale License
Don’t let the process of applying for a wholesale license prevent you from doing it. By getting a wholesale license, you can then buy from a manufacturer without paying taxes. This offers a huge benefit to your business. If you have to pay taxes every time you purchase goods from the manufacturer, you are spending more money on your purchases. You will then have to raise the prices you charge to customers. By having a wholesale license, you can help increase your small business’ efficiency. You can also consult with a lawyer to see if there are any other tax exemptions you should be aware of after getting your wholesale license.