How to Obtain a Tax ID/Resale Certificate For Your Online Business

Please note: We are not tax professionals.

Forming a legal business should be a priority when creating an online store. When doing this, it is imperative to note that the different steps and laws surrounding creating a business varies depending on what country, state and/or county you live in.

While we will only be discussing forming a business within the United States, you can view a guide for other countries here.

The Importance of Tax IDs

Obtaining a Tax ID is required when you want to work with legitimate wholesale distributors – they will ask for it upfront when submitting a dealer application. In order to build a sustainable online business ready for growth, this is a step you should not skip out on. There will be companies out there that say you don’t need a Tax ID, but these programs will cost you added fees and costs making it difficult for you to get into the business and be profitable. These kinds of companies are not wholesale distributors – they’re retailers selling you their product, which you will have to mark up even further.

Tax IDs may be called something different from state to state, but their purpose is the same. Legitimate wholesale distributors will not be charging you, as a dealer, the tax for the products they ship out to your customer. At the end of the year, these suppliers will have to show the IRS why they never charged you any tax, and this would be when they show your Tax ID number as proof you are the one collecting taxes from your own customers for purchases shipped within your own state. Most online ecommerce platforms make it easy to incorporate tax rates based on location to help you calculate how much you should charge.

How to Obtain a Tax ID

In order to obtain a Tax ID, simply navigate to the IRS website here where you will find all the instructions you need to apply.

What is a Resale Certificate and how do I get one?I

The purpose of obtaining a resale certificate is so that you aren’t obligated to pay local sales tax on goods purchased by your online business. It is also sometimes referred to as a tax exemption certificate. These are important to get when working with legitimate wholesale distributors because they will often request your resale certificate as proof you will be reselling the products bought from them at wholesale.

Without a resale certificate, you may not be able to work with some wholesale distributors, or you will be required by law to pay sales tax on every product purchased.

The process of obtaining a resale certificate can vary from state to state. The physical location of your business will determine which state you should apply with to get your resale certification, but if you are planning on reselling merchandise in multiple states, you will have to obtain a resale certificate for each state you are selling in. However, you will find that some cover multiple states, or some states don’t require one at all.

In order to find how you obtain a resale certificate for each state or each state’s requirements, click the link of the state below, and if you can’t find what you’re looking for, just google *State Name* Resale Certificates.

Alabama Alaska Arizona
Arkansas California Colorado
Connecticut Delaware D.C.
Florida Georgia Hawaii
Idaho Illinois Indiana
Iowa Kansas Kentucky
Louisiana Maine Maryland
Massachusetts Michigan Minnesota
Mississippi Missouri Montana
Nebraska Nevada New Hampshire
New Jersey New Mexico New York
North Carolina North Dakota Ohio
Oklahoma Oregon Pennsylvania
Rhode Island South Carolina South Dakota
Tennessee Texas Utah
Vermont Virginia Washington
West Virginia Wisconsin Wyoming

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