Chapter 14: Seller's Permits
If you plan on purchasing anything for resale, you’re going to want to have a seller’s permit. A seller’s permit allows you to purchase goods from a wholesale supplier without paying sales tax, as long as you intend to resell those goods to a customer at some point. To break it down:
Wholesale refers to anything you’re buying from a supplier that you will eventually resell to the customer. This could include blank clothing that you put designs on and sell, raw materials for your product, or anything else that goes into creating your product. Many wholesalers are manufacturers of basic components, ie. blank hoodies or raw materials. Retail refers to selling the finished product directly to the customer.
If you’re making any kind of physical product, finding good wholesale suppliers is a must. Generally, wholesalers offer bulk deals for low pricing, since they know their product is going to be marked up to be sold to the customer at a premium down the line. A large percentage of wholesale suppliers will require that you have an active seller’s permit in order to place an order from them, so the manufacturer doesn’t have to deal with collecting sales tax from you (since you plan to resell the product, the sales tax burden falls on you, and not the supplier).
A seller’s permit also allows (and requires) you to collect sales tax for whatever state the permit is from, and to file and pay accordingly.