If you are wanting to get a wholesale license tax license in Pennsylvania, you will need to apply for one. Doing so is simple when you follow these easy steps.
What is a Sales Tax License?
A Pennsylvania wholesale license is also known as a sales tax license or seller's permit.
Having a state-issued sales tax license is different from a business license. It enables you to purchase bulk goods for a discount price without paying sales tax.
In return, you charge the sales tax to customers when you sell goods.
With a sales tax license (wholesale license) combined with a Certificate of Authority, you will be exempt from paying taxation when you purchase items wholesale but will be responsible for paying sales tax obtained from customers.
How Sales Tax Licenses are Obtained
You can apply for your license on your own, or you can seek assistance from a law firm or business that helps you complete the process.
It is free to do it all yourself, but if you get help, you will pay for it.
What Does a Pennsylvania Seller's Permit Entail?
A wholesale license allows you to resell goods. In addition, it is a tax permit that gives you taxation-free status. The application can be found online.
A Pennsylvania seller's permit is not the same as a business license. It will require you to have a federal tax ID number, however.
How Pennsylvania Tax Works
Most states charge taxation on the sale of goods and services. The State of Pennsylvania is one of them. Pennsylvania charges a state tax of 6% for the sales of goods, online goods, and services that are conducted within the state.
In addition, county and local tax fees are charged. The total typically ends up being 6.34% of taxable sales
Federal tax is collected by the United States Government, not the state, and has nothing to do with a resale certificate.
Sales and Use Tax
The State of Pennsylvania has a "Sales and Use Tax," which is an equivalent tax that is taxes collected for purchases outside the state. More information can be learned online.
The payment is up to the buyer to file. It is set in place to discourage residents from buying from out-of-state merchants from states that don't charge state taxation simply to avoid having to owe the taxation.
When you pay to the state, you don't owe again for sales use tax. It is only when you don't owe taxation fees on goods or services that you owe the use taxation. Nor do you owe for filing.
Federal taxation is collected in a federal level process and is not associated with state tax.
Certificate of Authority
A Certificate of Authority is an official document that proves you are exempt from paying taxes when purchasing wholesale goods. It is different from your resale certificate license (permit). Filing for your company is not generally a problem as it is very straightforward when filing and easy to obtain.
There are no company fees to be paid.
Steps to Obtaining a Pennsylvania Wholesale License
A Pennsylvania wholesale license is only given to businesses and corporations that qualify.
You must apply for a license in order to get one, and you must be approved to collect tax.
The first thing you will need to do is to apply for a license with the Internal Revenue Service (IRS) for an Employer Identification Number (EIN). Once approved for the filing, they will do the official filing.
How to Get an EIN
You must have an Employer Identification Number in order to get a wholesale license for your business. Go to the Internal Revenue Service website to apply.
Research Pennsylvania State Requirements
If you want to get your wholesale license (wholesaler license) in Pennsylvania, you'll need to study to be sure you understand what stipulations there are. Check government sites to make sure the information online is legitimate.
To legally be operating and government approved to obtain a government license for retailers (seller's permit), you will a government ST-120eed to submit a resale form. Have your business address handy, so you can provide it and other identifying information when you apply for your seller's permit (retailers permit).
Steps to Take to Obtain a Permit
Download the Pennsylvania Certificate Form ST-120
On the Pennsylvania State Department of Taxation government online website, download the form. Now, as a wholesaler, you can proceed to the next step of the paperwork.
Fill Out the Form on the Paperwork
You will need to provide all the pertinent business information of your entity for your license that is requested, such as your name, business name, other businesses, nature of your business, your id number, LLC, business address, and other things as well such as other licenses you hold, and other details about your business.
Describe Your Situation
Applying for your license, you will be prompted to describe the business structure you have and the primary products you'll sell to end users.
Specify if you're a sole proprietorship or a one-person business or have a business partner. Whatever your business or LLC situation is, state it clearly. On your license application, state your primary business, income, other businesses, and employees. and miscellaneous services.
Certificate of Authority Number
You'll be required to prove you have your business Certificate of Authority Number and will need to provide evidence that it belongs to and who you're doing business with as well.
Purchase Type Selection
Select whether the purchase you will be making for your business is for and if it there's tangible personal property or certain services to be sold.
To collect sales taxes, if you don't live in the State of Pennsylvania or your business is not in the state, you'll fill in this part. Enter your tax ID and evidence of your state of registration.
Certify and Sign to Register
You'll need to certify the property is for resale from the seller (vendor or vendors) and to answer additional business information on your financial situation and store. Then sign and date the form to register.
More Valuable Information
As with many states, tax is a serious issue with the Pennsylvania Department of Revenue. Your wholesale license enables you to bypass paying tax and collect it from the end user.
Your license won't expire, but you may need to renew it. Your wholesale vendor will keep it on file and any proof if you are required to renew it.
Support in the process is easy to obtain when your register, and there is no cost or fee.
Once you have completed the requirements, you won't pay sales tax. You can collect sales tax and begin official business endeavors.