To get a reseller’s license, apply through the tax authority in each state where you’ll be making sales. You submit basic business information, receive a permit number, and then use a resale certificate when buying inventory so suppliers don’t charge you sales tax. From that point on, you collect sales tax from your customers and remit it to the state on the filing schedule they assign you.
The license goes by different names depending on the state: seller’s permit, sales tax permit, vendor’s license, or resale certificate. They all refer to the same underlying authorization.
Do You Actually Need One
If you regularly buy goods to resell them, yes. This covers brick-and-mortar retailers, online sellers, wholesalers, and anyone acting as a middleman between a supplier and an end customer. There is no federal reseller’s license. The requirement is entirely state-level, so you deal with each state’s tax authority individually.
A few situations change the answer:
- Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Operating exclusively in one of these generally means no reseller’s license is required. Alaska is a partial exception because some local jurisdictions impose their own sales tax and may require local permits.
- Temporary and seasonal sellers at craft fairs, flea markets, trade shows, and pop-ups usually need either a standard seller’s permit or a temporary one. Rules vary by state, but taxable sales trigger the registration requirement regardless of how briefly you’re selling.
- Businesses selling only services, or only items that are specifically exempt from sales tax in their state (most groceries, prescription medications), generally don’t need a reseller’s license because there’s no sales tax to collect.
Where to Apply in Your Home State
Applications go through the state tax authority. In most states this is the Department of Revenue. Some states use a Department of Taxation, a Comptroller’s office, or a similarly named agency. Applications are almost always available online.
Expect to provide:
- Your business name and address
- Entity type (sole proprietorship, LLC, corporation, and so on)
- Federal Employer Identification Number, or Social Security Number if you’re a sole proprietor without an EIN
- The date you started or plan to start making sales
- An estimate of expected monthly sales volume
Most states charge no fee for the initial permit. A few charge modest application fees. Some states may require a refundable security deposit if you’re a new business without a sales tax track record; the deposit protects the state in case you collect tax from customers but fail to send it in, and is typically returned after a set period of clean compliance.
When You Need Permits in Other States
Selling across state lines is where this gets complicated. In South Dakota v. Wayfair (2018), the U.S. Supreme Court held that states can require out-of-state sellers to collect sales tax even without a physical presence in the state, so long as the seller has enough economic connection, known as “economic nexus.”1Justia Law. South Dakota v Wayfair, Inc, 585 US 162 (2018)
The South Dakota law upheld in that case set the threshold at $100,000 in sales or 200 separate transactions in the state during a year. Most states have adopted similar thresholds. The most common trigger is $100,000 in annual sales into the state. California and Texas set the bar higher at $500,000. Some states still pair a transaction-count test with the dollar amount; others have dropped the transaction test. Once you cross a state’s threshold, you must register for a sales tax permit there, collect tax on sales shipped into the state, and file returns.
Selling Through Marketplaces
If you sell through platforms like Amazon, Etsy, or eBay, marketplace facilitator laws in nearly every sales-tax state shift the collection burden from you to the platform. The marketplace is treated as the seller for tax purposes and handles collecting and remitting sales tax on your behalf for sales made through it.2Streamlined Sales Tax. Marketplace Facilitator State Guidance
That doesn’t end your obligations. You’re still responsible for sales made outside the marketplace, through your own website, a physical store, or trade shows. Some states also still require marketplace sellers to register and file returns even where the platform handles collection.
Registering in Many States at Once
Applying to every state individually is tedious for national sellers. The Streamlined Sales Tax Registration System lets you register for sales tax accounts in over 20 member states through a single online application.3Streamlined Sales Tax. Registration FAQ You pick the states you want, submit one form, and the system routes your information to each. States can be added later through the same portal. Non-member states still require direct registration.
Using the Certificate Correctly
Once your license is issued, the day-to-day works like this: when you buy inventory or components from a supplier, you hand them a completed resale certificate. The certificate tells the supplier not to charge sales tax because the items are being purchased for resale. The supplier keeps the certificate on file as proof the tax-free sale was legitimate.4Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate – Multijurisdiction
Each state has its own resale certificate form. The Multistate Tax Commission also publishes a Uniform Sales and Use Tax Resale Certificate accepted by 36 states for multi-jurisdictional purchases.5Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate – Multijurisdiction The form asks for your business information, your sales tax registration numbers for the relevant states, and a description of the property being purchased.
Know the limits. The certificate only covers inventory and items that become part of a finished product you sell. Office supplies, cleaning products, the computer on your bookkeeper’s desk, the lamp in your showroom: those are consumed by your business, and you owe sales tax on them like any other buyer. If you buy something tax-free intending to resell it and then keep it for business or personal use, you owe use tax on that item, calculated at the same rate as sales tax and reported on your regular sales tax return. This is one of the most common issues flagged during audits.
What You Owe After You Have the License
Holding a reseller’s license means you’re collecting sales tax on behalf of the state, and the state expects you to hand it over on a set schedule. You’ll file sales tax returns monthly, quarterly, or annually depending on your sales volume and the state’s rules.6Streamlined Sales Tax. Filing Sales Tax Returns Higher-volume sellers file more often. Most states require a return every reporting period even when you had zero taxable sales. Skipping a period because you had nothing to report generates penalty notices.
Returns summarize gross sales, exempt and nontaxable sales, taxable sales, and tax collected. The math on any single return is simple. Staying organized across months and multiple states is where new sellers struggle, so set up bookkeeping before your first sale. Most states expect you to keep sales records, purchase invoices, and copies of resale certificates for at least three to four years, and some require longer. The IRS separately recommends keeping business tax records for at least three years from the filing date, longer in situations like underreported income.7Internal Revenue Service. How Long Should I Keep Records
If your business moves, adds a location, changes its legal structure, or closes, update or cancel your permit with each state where you’re registered. Leaving a permit open after you’ve stopped selling can leave you responsible for filing returns and facing late-filing penalties long after the fact.
What Happens If You Get It Wrong
States don’t treat sales tax violations casually. The money you collect from customers isn’t yours; it’s held in trust for the state. Failing to send it in, or never registering when you should have, triggers escalating consequences.
- Late filing and late payment usually carry percentage-based penalties on unpaid tax, commonly 5% to 25% of the amount due, plus interest accruing until the balance is paid.
- Operating without a required permit can result in steeper penalties, sometimes reaching 25% to 35% of the tax you should have been collecting, on top of back taxes and interest.
- Using your certificate to buy personal items or business supplies tax-free can result in the unpaid tax plus penalties of 10% or more. In serious cases, your permit can be revoked. Intentionally issuing a false resale certificate to evade tax is a criminal offense in many states, typically a misdemeanor.
- In many states, responsible individuals within a business (owners, officers, sometimes bookkeepers) can be held personally liable for sales tax that was collected from customers but never remitted. This liability can survive bankruptcy in some jurisdictions.
Honest mistakes usually produce penalties and interest that, while painful, are manageable. Intentional evasion opens the door to criminal exposure. If you realize you’ve fallen behind on returns or should have registered earlier than you did, contacting the state proactively almost always produces a better outcome than waiting for them to find you.