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Q.What is a Sales Tax Reseller Permit?
A.If your business requires the purchase of wholesale merchandise which will simple be resold to your customers, then you will want to procure a Reseller Permit. Because the merchandise is not for your company's own use, you do not need to pay sales tax to your supplier when you purchase the merchandise from them. In almost every case, your supplier will require you to provide them with a photocopy of your Resellers Permit, which in California is issued by the State Board of Equalization.
Beware....your reseller permit only permits you to purchase wholesale merchandise that you normally would sell in your business. If you own a mechanics shop, you may purchase car parts via your Reseller's Permit, but you cannot purchase computer equipment without paying any Sales Tax.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this web site is not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed on a taxpayer under the U.S. Internal Revenue Service.
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