When you venture into business or start selling items, you will require a reseller permit. California reseller permit allows you to sell items or services and collect sales tax. The function of the permit is for the state to regulate the process of collecting, paying and reporting sales tax.
Businesses must deal with sales tax since they collect taxes on behalf of the state. But do all businesses need reseller permit?
If you intend to do the following, apply for a reseller permit:
- Sell any product or service
- Accept sales tax exemption certificates
As you begin your venture and add items and services, it’s prudent to check with the California Department of Tax and Fee Administration to ascertain if your business must handle sales taxes.
Once you’ve ascertained that your products or services are subject to sales taxes, you will have to do some things to get a reseller permit. Here are some of them:
Business Tax ID Numbers
You must obtain a tax ID for your enterprise. Although it’s also referred to as an employer ID (EIN), you must have it even if you don’t hire employees. It’s a federal tax number similar to a social security number. Fortunately, you can apply and get your EIN online.
The government categorized businesses based on the type of products or services offered. For various types of taxable services and products your business offers, you must show their NAICS code.
You will provide information about the legal type of your business and its starting date. Get ready to also provide information regarding your business bank account.
Getting California Reseller Permit
Like most states, California allows you to file your application and pay online. You can apply directly by visiting the California Department of Tax and Fee Administration website or employ the expedited process from FastFilings.com.
To complete the registration process, you will need the following information, in addition to the ones mentioned earlier.
- Business name and previous business identity
- Business calendar quarters
- The initial date for collecting sales tax
- Products and services offered
- Sales tax estimates
- Consolidated return filing if you have other branches
For verification, you may be asked to submit the following:
- Social security number
- Photocopy of your ID
- Name and location of your bank account
- Names of suppliers
- The person maintaining your account
- Personal reference (name & address)
- Projected monthly taxable sales
Once registration is complete, you have to set up accounting processes to collect sales taxes on all transaction. And finally, you will set up periodic reports and payment for the sale taxes.
California resellers permit is undoubtedly important for all businesses. Without one, you may not enjoy tax exemptions. For an expedited process contact Fast Filings.