Sales Tax ID FAQ
Sales Tax ID FAQ
Please choose from one of the topics below:
#1 Q: Do I need a Tax ID to work with SMITH DISTRIBUTORS?
A: Yes, to work with SMITH DISTRIBUTORS, you are required to have a tax ID. This is often referred to as a Sales & Use Tax ID in most states, but it may also be called a Seller's Permit or Reseller Certificate. Please consult your State's Department of Revenue for more details.
#2 Q: Do I need a Tax ID to work with SMITH DISTRIBUTORS if I am only planning to sell on eBay or Amazon?
A: Yes, a tax ID is necessary to work with SMITH DISTRIBUTORS. Refer to your State’s Department of Revenue’s website for guidance on obtaining a sales & use tax ID.
#3 Q: Can I use my website as my registered business name?
A: Your website or online store serves as your store name. Your business name can differ from your store name, but it is essential to register your business with your state.
#4 Q: I have an EIN. Is this the Tax ID that suppliers require to work with them?
A: An EIN is a federal identification number that enables you to hire employees and file taxes for them. While many wholesale suppliers may accept an EIN, you must also obtain a Tax ID to collect sales tax from customers located in your state.
#5 Q: How do taxes work?
A: Aiming an ID is relatively straightforward. Many states offer online registration forms. Locate your State’s Department of Revenue using a search engine; the official website will typically end in .gov. Search for terms like “State Name Department of Revenue” or “Getting a Tax ID in State Name.”
#6 Q: What are the rules for sales tax?
A: Sales Tax Rules - As a seller, you are responsible for calculating and charging the appropriate state, county, city, and other local sales tax rates based on your buyer's location. Always adhere to the sales tax laws of the state where your buyer resides. Never charge a customer sales tax from another state. Determine whether additional state sales tax applies for the buyer’s state. Our Michigan sales tax is 6.00%
Making Your Online Business Legal: Why and How
It is not unusual for new online retailers to feel overwhelmed by the process of obtaining reseller certificates, EINs, and DBAs. However, if you sell physical goods online, it is essential to overcome the paperwork to enjoy the advantages of being a legally recognized business. To purchase inventory from legitimate wholesale suppliers, you must operate as an official, legal entity.
If the IRS discovers wholesaler selling tax-exempt goods to an end consumer, the wholesaler could face significant legal and financial repercussions. Consequently, business purchasing from them must prove that they are a legally authorized reseller, acquiring goods for resale rather than personal use.
Identification Will Be Required...
Scan and attach your Sales Tax License:
Send the file to CustomerService@smithdistributors.com or Sales@smithdistributors.com.
As an online retailer, you are responsible for collecting and remitting sales tax on all sales to customers in your state. Therefore, it is legally required to register for a state sales tax ID (also known as a reseller certificate) when establishing your business. Registration is straightforward and can be completed by visiting your state tax authority website, selecting 'Forms and Publications,' and filling out the registration form. A copy of this document is typically used to verify the legitimacy of your business.
Not all states impose a sales tax on retail, which adds complexity to the. If you reside in a tax-exempt state, obtaining a reseller certificate is not possible. In such cases, a wholesaler will require an alternative form of identification to verify the legitimacy of your business.
Common alternative proofs include the following:
- If you operate as a sole proprietor or partnership, you can file a Doing Business (DBA) certificate at your county clerk's office and provide your wholesaler with a copy.
- For LLCs or corporations, you can provide your wholesaler with a copy of your filed certificate of organization or articles of organization. Additionally, you must include the confirmation form received by mail, which assures the supplier that the document has been officially filed.
- If you operate without a trading name or DBA, you will likely need to provide a federal tax ID (EIN). While the law permits using your Social Security number or an EIN, it is advisable to obtain one from the government, as they are free. Using an EIN for business correspondence ensures you avoid sharing your SSN unnecessarily.
- Another option is to your state tax ID number, which from a state sales tax ID number. Even in states without sales tax, other state taxes may apply to your business. Typically, the state issues a state tax ID number, which can serve as business identification.
Ultimately, regardless of how you structure your online business, must take the necessary steps to establish it as a legitimate and authorized entity before engaging with genuine wholesale suppliers. The minimal time and effort required will yield significant benefits by enabling you to secure wholesale accounts and maintain a consistent, reliable product supply at prices that for profitability.