A Seller’s Permit authorizes you to collect sales tax on taxable transactions involving goods and services. When you sell a tangible item, the state government requires you to add sales tax to the retail purchase price of your goods and services. That is called Sales Tax. The Seller’s Permit allows you to collect the sales tax from the consumer and remit it to the government.

Who needs a Seller’s Permit?

A Seller’s Permit is required for any entity (Corporation, LLC, Partnership, or Sole-Proprietorship) that sells tangible products. In simple terms, if you sell a product that a client can hold or touch, it most likely requires a Seller’s Permit to sell. In some states, services rendered may also be subject to sales tax.

Seller’s Permit Vs Wholesale License or Resellers Permit

What’s the difference?

• Seller’s Permit: The permit to sell a tangible good or service and collect sales tax from your client.
• Wholesale License: The license that gives you the ability to make wholesale purchases from other vendors without paying sales tax on those purchases.
• Resellers Permit: The permit allows you to sell goods to other vendors without charging the recipient sales tax on their purchase. The goods are being sold to another vendor, not the final consumer, and therefore a Reseller’s Permit would be required.

Now that we understand what each license or permit is, it is also important to note that in most states, there is only one permit that handles all 3 functions. If you plan to handle this process yourself, please ensure you are very clear with the government agency about your intention with the permit, so that you can determine the correct permit/license for your specific business needs.