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How and Why To Get A State Sales Tax Number

by: Skip McGrath

Most states charge sales tax on goods sold within their state. A lot of eBay and web site sellers seem to wonder why they need a sales tax number. If you only run a few auctions for used goods you buy at garage sales, I wouldn't worry about it. But if you run several auctions a week, you probably should get one.

There are three reasons for having a state sales tax number (also called a Resale certificate or Resale Number)

  1. It's the law. If you sell goods on eBay or the internet and ship them to someone in your same state, then you have to collect (charge the buyer) sales tax and pay that tax to your state. However, if you sell less than $4 million in annual sales (I think that covers most of us), then you do not have to collect or pay sales tax on sales where you deliver the goods to an out-of-state address. For example, if you live in Virginia and you sell something to someone else in Virginia or to someone out-of-state that asks you to ship it to someone in Virginia, then you need to collect and pay sales tax to the State of VA. But, if you sell the same item to someone in Florida, you can forget all about the tax.
  2. You can purchase items without paying sales tax on them. When you buy something that you plan to resell, you can purchase it without paying sales tax. But it must be for resale. For example you can not buy a new computer to use in your office and not legally pay sales tax. But if you go on Liquidation.com and buy a computer that you plan to sell on eBay, then you can buy it without paying sales tax.
  3. Most wholesale companies require a sales tax certificate . Almost all legitimate wholesale companies will ask for a copy of your resale certificate before they will sell to you at wholesale prices. Besides wholesale companies, in most states you need it to open a commercial checking account. Every wholesale trade show and merchandise mart I have ever been to requires a copy before letting you in.

If your state does not charge sales tax, (Oregon and Idaho for example) then it will probably issue some type of Business License that will serve the same purpose for wholesale companies.

Getting a sales tax number is very easy and inexpensive. You can link to any of the states below to get information on obtaining a sales ore use tax number. Some of the states allow you to apply on line and other will give you forms to download, fill out and mail in.

For some reason links to government sites seem to change often. If one of these links doesn't work, simply type in www.xx.gov. Just replace the " x x" with the two letters of the state you want. For example, www.wa.gov will get you to the State of Washington web site.

Alabama
Alaska*
Arizona
Arkansas
California
Colorado
Connecticut
Delaware*
District of Columbia
Florida
Georgia
Hawaii*
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri 

Montana*
Nebraska
Nevada
New Hampshire*
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon*
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

* These states don't have a conventional sales tax as this article is being written. A link is provided where you can find more info on that state's tax, business, and/or licensing requirements.

 

 

 

 







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