What is a Reseller Certificate?
A Reseller Certificate allows you, through your business, to buy goods without paying tax. It is your responsibility to collect the applicable taxes from your customers when they order the product from you. Currently, most states require you to collect taxes from customers who reside in the state your business is registered in. If you need to clarify your State's position on collecting taxes, you should refer to your State's tax webpage for current information.
Who Needs a Reseller Certificate?
Basically, if you purchase products with the intent to resell it to someone else, you should have a reseller certificate. More importantly, the reseller certificate allows you to do business with wholesalers and distributors who normally require a valid Tax ID to open an account. The wholesaler will ask you to provide a Resale Certificate as proof that the property is being purchased for resale. This allows them to sell their products to you without having to collect taxes from you. Essentially, they're placing the burden of collecting taxes in your hands. Whatever there reasons, if you don't have a reseller certificate, they're not going to give you business. If you're in the business of selling products online, check your State's taxation website for information on how to obtain a Reseller Certificate.
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