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Reseller ID/Charging Tax

by Audarah
9 replies
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Hello again,
After a snafu with the state (I forgot to send in a docketing statement for my LLC which I should have known better, since in my offline adventures I am a certified paralegal), so it is taking me longer to get filed.

Taking me longer to get filed also means holding back my dealer applications with various distributors. But I was going over most of the applications and they ask for reseller IDs which is a sales tax exemption- you get that so that you dont get charged tax on items because you are going to CHARGE tax on the items you turn around and resale.

Are you all charging tax? I can give them my EIN and Business ID numbers once I get my papers, but I didnt think I would have to be required to be sales exempt and therefore charge sales tax at my stores.

You all do this? Let me know
#id or charging #reseller #tax
  • Profile picture of the author redlegrich
    Ummmm, you better be charging sales tax where appropriate. The landscape is getting more complex in this arena though. Better check in your state what the requirements are. In general you need to charge tax on eligible purchases in the state(s) where you have a physical presence. Otherwise, no tax. But, others states are sticking their mitts out for you to collect sales tax for sales into their state. Some of that enforcement is based on the annual volume you do and things like that. But, to be safe find the right expert and get a reading from them. Don't depend on the opinions of folks here 100%.

    Governments get nasty when you don't pay up!
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  • Profile picture of the author timpears
    If your buyer is liable to pay sales tax on something they bought from you, you better collect it and turn it in, or you will need to pay it yourself. Unless you are gong to try and fly under the radar, which by the sounds of it you aren't, or you wouldn't be doing all this paper work.

    And flying under the radar will eventually get you in trouble.
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    Tim Pears

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    • Profile picture of the author OnlineStoreHelp
      Reach out to the supplier, tell them your reseller application had a couple issues but you are more then happy to show them your articles of incorporation for your LLC to show them you are a true business. Then in 30 or 60 days when the reseller cert arrives you will forward it right away. Most will give you a short exemption and if not tell them, your other suppliers understand the difficulty in dealing with the state and county at times. You are more then happy to wait but the other companies made an exception.

      As for collecting tax, you still have to remit sales, excise or VAT to the respective taxing authority. That being said, there is nothing that says you have to collect it from your customers. You may still owe, it but you can just pay it on their behalf. I wouldn't recommend it but you can. Think of the number of retail stores that do "sales tax" specials where they cover the sales tax.

      Depending on the state, some say you need your reseller cert before you start business, others say it just needs to be done with in 60 days of going into business. What is your states rules?
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  • Profile picture of the author imsas
    You most likely will need to be collecting sales tax on the state where you reside (or your business resides).. So to be safe start collecting sales tax on sales that are generated on your home state.. Once your paperwork is in order you can start filing and paying those taxes..
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  • Profile picture of the author Auctiondebteliminator
    So you need to charge it?

    No.

    Do you need to pay it?

    Yes.

    That is why most people charge it.

    The government doesn't care if you're passing this charge onto your customers or not - they just care if they're getting paid from YOU on the applicable sales.

    Always, always, always file.

    And always use a professional accountant.
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  • Profile picture of the author kettlecorn
    How do you get a sales reseller permit when the application requires suppliers AND suppliers also require this permit? It's a catch 22!
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    • Profile picture of the author Audarah
      Hi guys, thanks for all your advice. I figured out - talked to an attorney, that I need to tax california and pa. I guess california REALLY is cracking down on all ecommerce stores and if someone lives there and purchases from you,it doesnt matter where you live,they want their money. And then I have to tax my home state, PA - so anyone that orders from me and lives in PA, I pay taxes on that or I will get in trouble.

      I am not really sure what the one poster was asking on how do you get a reseller certificate when the application requires it and suppliers, but suppliers need it. Just form your company, get your business papers, file for your EIN and reseller certificate ( you can do this online and have them the next day instead of waiting) and if you dont have other suppliers, just leave it blank. That is what I am doing with my applications. They want to know what other suppliers I am working with. I have a few ( some dont require EINS and all that) but for the most part, I left it blank. STILL waiting on the comnmonwealth to get on the ball and send me back my papers. I made a mistake and didnt send them the correct paper at first, but they cashed their check weeks ago. Without those papers, I cant apply for the EIN and Tax Exemption/Reseller certificate. Grumble. The suppliers wont even look at me until I have those, and will not give me a grace period. Going to call PA tomorrow if I dont receive something by then.
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  • Profile picture of the author york
    Here is how to get a sales tax certificate:

    How and Why To Get A State Sales Tax Number
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    • Profile picture of the author justray
      Check with your state officials, first. Mine said that if I have made verbal agreements on pricing, and have intentions of doing business with them (even without a written contract), then I could put them down. "In good faith," is the term. What happens if you find two distributors on contract, and decide to go with someone else? Would you go through and change that information? I don't think so
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