Business Permit for Drop Shippers
Filed under Sourcing Tips, Wholesale Business Tips
Is there a business permit for drop shippers? and Do I need a business permit to buy wholesale? are common product sourcing questions. And there is a great deal of mystery and confusion surrounding the the issue tax permits.
The answer is this; if you purchase goods from a true wholesale business, then you will be required to present a state sales tax permit. A drop shipper who is also a true wholesale agent will also need to see a state sales tax permit. If your products supplier does not require a sales tax permit, then it is not a true wholesaler.
Now, whether or not a business requires a sales tax permit is only an issue if the business represents itself as a wholesaler when it is not. Many product suppliers targetting new eBay sellers promote “wholesale prices” and use the word “wholesale” in their copy to suggest they are wholesalers. That is deceptive, in my opinion, and if you look closely, you will see that many of those sites never explicitly say they are wholesalers, and they do not require a sales tax permit.
However, as you may have noticed, there are zillions of businesses advertising “wholesale” prices that do not require tax permits. And the reason is that those businesses are not true wholesale businesses. They may be liquidators, or closeout agents, or product brokers, or some other sort of business–and their prices may indeed be great, but they are not wholesalers. I’ll add, here, that some of your best prices may come from other sources than wholesalers.
A state sales tax permit is usually very easy to get, generally free of charge, and takes little more than a phone call or filling out a free application online with the agency in your state in charge of business licensing. This is normally you state department of revenue. It really is not much more complicated than that! Do not fall for middlemen who offer to get you a business license or tax permit for a fee. This is the equivalent of someone charging you to tell you where you got your shoes (on your feet, right?).
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