What exactly is a Seller’s Permit? Sometimes referred to as a Sales Tax License or Resale License this is simply a legal permit to sell taxable merchandise. As a seller’s permit holder, you agree to collect and remit sales tax to the Franchise Tax Board in your specific state. You will need to obtain a sellers permit if you plan on purchasing merchandise on a wholesale level, as most suppliers will require that your license be on file. The license tells the wholesale supplier that you are engaged in reselling merchandise and collecting the appropriate amount of sales tax as required by the Franchise Tax board for your state.

Anyone engaged in retailing merchandise must apply for a state resale license with the State board of Equalization. The process consist of filling out an application offering information about your business. The issuance of your license can take up to two weeks after you application has been submitted.

An application for a resale license will contain all the information you will need to comply with collecting and distributing sales tax for the items you retail in your state. You must collect sales tax for those items which are purchased in the same state your business resides in. For example, an apparel retailer who operates in California must charge sales tax for any purchases or shipment of merchandise (on a retail level) in the state of California. Please consult the Franchise Tax Board or your accountant for retail sales across state lines.