Seller’s Permit (State Sales Tax ID)

In most states, you are required to collect sales tax from customer for any product that you sell. To do that, and to help your state or other local government, you will have to obtain a seller’s permit.

That can be a more complicated question than you may first imagine. You may want to speak with a professional accountant about what sales you make require the collection of sales tax. As a general rule, if you have a physical nexus (or fancy word for physical connection as it relates to your sales) with the state where a sale of product is made, you will have to collect sales taxes. When you are dealing with e-commerce, it gets more complicated and you may want to talk to a specialist.

In many states, you only have to obtain one permit at the state level. Some jurisdictions may require, however, that you obtain one from your county or city government as well.

It is a tax imposed by state and local governments “in exchange for the privilege” of selling goods in their jurisdictions. Most companies pass through the sales tax to the customer, but it is your responsibility to collect them. If you are making sales of taxable property, you are required to register to collect sales tax in any state in which you maintain a substantial physical presence. If you then make a sale in a state where you have registered, you are required to collect sales tax on any order delivered to that state unless a valid exemption is applied - applicable to the purchasing entity or the nature of item sold.

Some sales are exempt, meaning not subject to, state sales taxes. You may want to visit with your sales tax specialist because it is not always clear, but generally speaking there are some types of transactions that are more likely to be exempt. By way of example, the following may be exempt: non-profits may be exempt, purchases for raw materials by manufacturers, resellers, drop shipments, necessity goods at your grocery store may be exempt, intangible goods and services, goods sold to governments. While it can be complicated, to be entitled to some of these exemptions, you may need a license Swyft Filings can help you with such as a reseller’s permit.