What is a seller's permit?

A seller's permit, also known as a sales tax permit or sales and use tax permit, is a state-issued business license that allows businesses to collect sales tax on taxable goods and services. This permit enables businesses to legally sell items at the wholesale or retail level and issue resale certificates to suppliers, allowing them to purchase items for their business operations without paying sales tax to their suppliers. The collected sales tax must then be remitted to the state taxing authority.

Seller's permits are state-specific, meaning they allow businesses to collect and remit the required sales tax in the state where the permit is issued. If a business operates in multiple states, it may need to obtain a separate seller's permit for each state. The process of obtaining a seller's permit varies by state, but most require businesses to complete an application with their Department of Revenue.

In addition to collecting sales tax, some states also require businesses to collect local sales tax. It is essential for businesses to research permitting requirements in all states where they have a physical presence or conduct business. Obtaining a seller's permit before starting to sell goods or services ensures compliance with state and local laws, helping businesses avoid fines and penalties for failing to collect and remit sales tax.