Reseller Permit: What It Is and Whether You Need One

A reseller permit is a state sales tax registration that lets a business sell taxable goods and buy inventory for resale without paying sales tax on it. Depending on the state, the same thing is called a seller's permit, sales tax permit, resale license or reseller permit, and whether you need one depends on how regularly you sell, not on how much you earn.

This guide explains what the permit does, when online resellers need one, how to apply using real state examples, and what it costs to get wrong.

What is a reseller permit?

A reseller permit is your registration with a state to collect and report sales tax. It does two jobs:

1. It lets you sell taxable goods legally in that state and report the sales tax.
2. It lets you buy inventory tax-free, because the tax will be collected later from your customer.

States use different names for it:

Other states use "resale license", "sales tax license" or "certificate of authority". If you're still deciding whether reselling is right for you, start with our guide to reselling for profit and come back to the paperwork once you're making regular sales.

Reseller permit vs resale certificate: what's the difference?

The permit is what the state gives you; the certificate is what you give your suppliers. The Sales Tax Institute puts it simply: a resale license is issued to businesses that sell taxable goods, and a resale certificate is the form you hand to suppliers to show a purchase is for resale.

You usually need the registration first. In Texas, for example, the Comptroller's FAQ says a purchaser with a Texas taxpayer number can issue its resale certificate, Form 01-339. How to use certificates with wholesalers, and how to spot suppliers that never ask for one, is covered in our guide to vendors for reselling.

Do you need a reseller permit to sell online?

You likely need one if you're in the business of selling taxable goods in a state, even part-time and even online. You likely don't if you're just clearing out your own belongings now and then.

California is a useful example of where the line sits. The CDTFA says that if you sell tangible goods in California, you're generally required to hold a seller's permit, including sales made through internet auction sites and online classifieds. It treats occasional sales, no more than two in a 12-month period, as generally not needing a permit, but says the number, scope and character of your selling can make you a business anyway. Someone flipping thrift finds every week is in a different position from someone holding one garage sale.

What if the marketplace collects sales tax?

Many platforms are marketplace facilitators: state laws require them to collect and remit sales tax on sales they handle for you. The Streamlined Sales Tax organization tracks these laws state by state, and each state sets its own thresholds for when a platform must collect.

That doesn't always end your obligations. Streamlined Sales Tax says marketplace sellers may still be required to register and file returns in a state. Vinted's US help center makes a similar point: it collects sales tax in the states where it must, but sellers who pass a state's threshold where Vinted doesn't collect may need to handle it themselves.

In practice:

• Selling only on marketplaces, occasionally: often no permit needed, but check your state.
• Selling regularly, including in person, at markets or on your own website: you probably need to register.
• Buying wholesale inventory: most suppliers will ask for a permit number before selling to you tax-free.

How do you get a reseller permit?

You apply to the revenue agency in the state where your business is based, usually online and often for free. The steps are similar everywhere:

1. Find your state's agency. Search for your state's department of revenue, taxation or comptroller.
2. Gather your details: legal name, Social Security number or EIN, business name and address, what you sell, and when you started.
3. Apply online. Texas, for instance, says to allow two to three weeks to receive a permit, and applicants must be at least 18.
4. Note your filing schedule. The state tells you how often to file sales tax returns.
5. Keep the permit on file and use its number on resale certificates for your suppliers.

Two state examples

• California. The CDTFA says there is no fee for a seller's permit, but it may require a security deposit to cover taxes that might go unpaid if the business later closes. Sellers operating only for short periods, such as a seasonal stall, can apply for a temporary seller's permit, which typically covers up to 90 days at one location.
• Washington. The Department of Revenue issues reseller permits that let retailers and wholesalers buy items for resale without paying sales tax. You need the appropriate business licenses first. Permits are generally valid for four years, or two years for some businesses, including those opened within the last 12 months.

What does a reseller permit cost to keep?

The permit itself is often free; the ongoing work is the real cost. Once you're registered, you take on obligations:

• File returns on schedule, even for periods with no taxable sales, if your state requires it.
• Collect and pay tax on direct sales the marketplace doesn't cover, such as local cash sales or your own website.
• Keep records of every sale, every tax-free purchase and the certificates you issued. California reminds permit holders that they must report and pay sales and use taxes and keep adequate records.
• Renew or update the permit when it expires or your business details change.

This is also why registering too early can be a hassle: a beginner with a handful of sales a month may face returns and deadlines for very little benefit. If you're still in your first month, the order of operations in how to start reselling is a better place to begin.

What happens if you misuse a reseller permit?

States take misuse seriously, even when it's a mistake. A permit or resale certificate only covers goods you'll actually resell, not personal items, gifts or the supplies you use to run the business.

• Washington says anyone found using a permit inappropriately owes the tax due plus a 50% penalty, even if there was no intent to commit fraud, and the permit can be revoked. Its list of things you can't buy tax-free includes personal items, gifts, business supplies, equipment and tools.
• Texas sets criminal penalties for resale certificate misuse, from a Class C misdemeanor when less than $20 in tax is evaded up to a second-degree felony at $20,000 or more.

The safe habit is simple: buy personal items and business supplies with tax paid, and use your permit only for inventory.

What about sellers outside the US?

Resale permits are a US sales tax concept. In the UK, Canada and Australia, businesses register for VAT or GST once they pass a turnover threshold and reclaim tax on business purchases instead. Check HMRC, the CRA or the ATO for current thresholds, and see how to scale a reselling business for the income tax side in each country.

Next steps

Work out whether you're selling as a business, check your state's revenue department, and register before you start buying wholesale.

• Confirm the basics of what's legal to resell in is reselling legal.
• Plan sourcing, pricing and record-keeping with our step-by-step flipping and reselling guide.

For other ways to earn, see our guide to making money online.