Question about a dealership application (Resale #)

**Tdadd** · 12-21-2009 02:35 PM

Hi guys, this is my first time posting on Young Entrepreneur, and I'm glad to finally be a part of the community.

I am trying to become a dealer of a company, and I'm having trouble understanding what a few things on their required forms are.

They ask for a resale # and a copy of the resale certificate. What are these two things? Are they associated to a tax ID? Do you have to be registered with the state to get a resale number/certificate?

Any help is greatly appreciated.

**Bodge4** · 12-21-2009 02:51 PM

Its usually the same number as your EIN but done on the state level. Check your states website on how to obtain the license.

**Tdadd** · 12-21-2009 03:10 PM

Thanks alot Bodge. Also, if I file for a Tax ID number, do I need to be incorporated first? And if I have a Tax ID number, am I required to pay taxes on every online sale I make? I'm not sure if I make enough money yet to start paying taxes on my earnings. Nor do I even know enough about this whole process of filing taxes yet because I'm only 16.

Thanks again.

**peteVA** · 12-21-2009 04:41 PM

Totally incorrect. The EIN and resale number are two entirely different things.

The EIN is simply the "social security number for your business". This is a federal issued number for reporting income and withholding taxes, social security and medicare withholdings and other Federal matters.

Your resale number and sales tax number are often the same. This shows that you have registered with your STATE to collect and remit sales and use taxes. If you live in one of the 4 states with no sales tax, you just have to say so, or fax or scan a copy of your state or local business license.

The Resale Certificate basically shows that you are registered to collect sales taxes in your state and are therefore exempt from paying them when buying goods for resale.

This means that if you are selling pots and pans that you can buy them from your supplier without paying sales tax. It also means you are responsible for collecting and remitting the sales taxes from sale of these pots and pans within your state. You are so responsible that you are required to pay them, even if you do not collect them.

It does not mean you can buy an order pad and some office equipment without paying sales taxes, since you are not reselling them. It only relates to goods bought for resale. And, should you take a set of those pots and pans home with you for personal use, you will also owe sales tax on that set. Actually, at that point it's called Use tax. You bought without paying tax, you Used it, so you still owe sales tax.

Beware of misinformation such as you received above. The net is overflowing with garbage that is not correct and people are getting into trouble listening to those who do not know.