Important Aspects to Know About Wholesale License in California
A wholesaler is a business entity that purchases goods in bulk and resells them to retailers. If you are a wholesaler, whether you sell your products through stores, from your home or online, you must obtain a wholesale license. In California, it’s called a “seller’s permit” and it is issued by the California Department of Tax and Fee Administration (CDTFA). As a wholesaler, there are important aspects that you should know regarding wholesale license in California. They include:
- A seller’s permit is not the same as a business license
A seller’s permit and a business license are two separate licenses that you must have. This means that one doesn’t substitute the other. Before you can obtain a seller’s permit, you must register your business to obtain a business license. Therefore, you apply for a business license first, then a wholesale license after.
- A seller’s permit is a must if you’re “engaged in business” in California
Your business is considered “engaged in business” in the state of California provided that you have a presence in the state. So, even if your main office is situated in another state, but you have a store, salesroom, office, agent, canvasser or sales representative in California, you will be required to obtain a seller’s permit from the CDTFA.
- Multiple business locations require separate permits for each location
In California, wholesalers are required to have a seller’s permit for each location or active place of business. If you have multiple stores, offices or outlets across different locations in California, you will be required to obtain multiple permits for each of the stores. The separate permits will display the same taxpayer identification number, but they will have separate sequence or outlet numbers.
- You need a resale certificate to be exempt from paying sales taxes
While a seller’s permit allows you to sell taxable goods to consumers, it doesn’t exempt you from paying sales tax when you purchase your goods. To be exempt from paying sales taxes, you’ll need to obtain a resale certificate, also called a reseller permit. This will allow you to purchase goods from manufacturers and resell them without paying sales taxes.
To avoid being on the wrong side of the law, it’s best to obtain a reseller license and other pertinent permits accordingly. You can either apply for the permit directly via the California Board of Equalization or you can apply online.
There are many advantages of applying for a California wholesale license online, including an easy application process, quick response times, and unlimited support and assistance. All you need to do is to complete a secure online form, then wait for your permit.