We are going to talk about a topic that is actually quite simple and is something that people selling on Amazon ask a lot about and cannot figure out.
Entrance
Let's say you are an Amazon seller and you buy your products in bulk from a wholesaler in Usa, send them to Amazon warehouses, and from there you sell them at retail to Usans.
During this process, if you do not tell the wholesaler from whom you purchased the goods that you are a dealer, they will treat you as an end user and ask you to pay sales tax. If you do not have a dealer license, you will be an end user and will be charged sales tax as if you were purchasing the product at retail. However, if you indicate to the wholesaler that you are a dealer and present your certificate, you will not pay tax when purchasing the product.
Does the Wholesaler Request This Document From You?
In the introductory text above, we mentioned that the wholesaler will treat you as an end user, but although it may seem like this in theory, things may not work that way in real life.
The wholesaler wants to see your document when selling goods to you wholesale. The reason for this is that when they give you a product without this document, they will need to collect tax from you and pay this tax back to the government, they generally do not want to deal with this.
So what is this document?
It usually has more than one name and they all lead to the same thing, which we will detail below.
What is Reseller License?
We can translate it into our language as a resale license or dealer license. This document, known as the reseller license, is actually known by more than one name, but as we said, the reseller license, which all amounts to the same thing, is a resale certificate.
Reseller License is also known as the following names; the wholesaler may request this document from you under these names. I would like to mention all the names in the market so that you won't be unfamiliar with them when you hear them.
Other names are:
- Reseller License
- Resale License
- Reseller's License
- Resale Certificate
- Reseller's Certificate
- Nontaxable transaction certificate
- Sales tax Exemption Certificate
- Sales Tax ID
What is a Business License?
It is a document that has nothing to do with the above. It is often confused but used for a different purpose. Business License is generally the document required for products whose sale is subject to permission.
For example, let's say you have an LLC company in California and you will sell a product that requires a permit in that state. (For example, pesticides, etc.) In order to sell products subject to such permission, you need to get this license from that state. In fact, it can be compared to the license system in Turkey, but it is a little different there.
Since such products are not sold in the e-commerce sector or on platforms such as Amazon and Shopify, there is no need for this document. In short, an e-commerce entrepreneur does not need to obtain a Business License to trade on platforms such as Shopify, Amazon, Ebay and Etsy.
How to Get a Resale Certificate?
You can obtain this certificate from the state where your company was incorporated. It is generally preferred for Amazon to form an llc in the state of Wyoming. Wyoming has many advantages in terms of tax, but another advantage is that Amazon suppliers, in particular, apply fewer procedures to companies formed in this state and value the resale certificate they receive more. Many e-commerce entrepreneurs dealing with Amazon say this based on their past experiences.
You can obtain the resale certificate yourself from the state website. Once your company is formed and the EIN is obtained, there is no obstacle for you to register for resale.
I will share a step-by-step video on how to obtain this certificate. By following these steps, you can obtain a resale certificate for your company formed in the state of Wyoming.
What Happens If You Cannot Sell the Products You Purchased with a Reseller License?
When you sell the products you bought from the wholesaler with a reseller license, you will need to collect taxes from the customers. This is already obvious, but if these products are not sold, you will have to return the tax on the products to the state after a certain period of time. Because you bought these products from the wholesaler to sell them by showing a certificate, you did not pay the tax. So the tax is on you. As a result, if these products are not sold, you will need to pay sales tax by consulting your accountant.
Conclusion
When you buy wholesale products with a Reseller License to collect sales tax, this is not all, there is also the process of collecting these taxes and returning them to the state. The important point here is where you sell and your sales volume. When it comes to dropshipping, there is no problem with the reseller license because the products are bought and sold one by one and there is no problem of collecting sales tax as long as state limits are not exceeded.
If you have high-volume sales on Amazon and have started to sell high-volume sales in multiple states, it's time to hire a CPA. Because no matter how much research you do, US taxation is highly variable depending on each business model. It is a subject that varies greatly, from the location of the warehouses where your products are stored on Amazon, to the state where you sell, your sales volume, where and how you opened a seller account, and the structure of your company. Rather than getting bogged down in such a large and complex system and having trouble focusing on your business, it would be very wise to work with an accountant or tax expert who is an expert in his field.
Generally, there are a lot of questions about finding an accountant, and when many sellers raise the issue with Turkish accountants, the situation becomes complicated. There are certainly many accountants in Turkey who know the US tax system, but if you cannot reach them, the second option may be to reach an accountant who specializes in E-commerce in the USA. Accounting Firms in America that we referenced from the Taxjar blog can be a reference for you on this subject.
Sources:
https://www.corpnet.com/blog/reseller-license/
https://www.taxjar.com/guides/sales-tax-guide-for-amazon-fba/#determining-sales-tax-nexus
63 Comments . New Comment
Hello, good luck. What steps should we follow if we want to cancel this Resale Certificate?
Can a person with an llc in the UK obtain a resale certificate? Because this person buys products from Usa and sells in England.
Can't take it.
Hello,
I applied for a resale certificate in New Jersey State and received my tax registration number. However, when I want to file a tax, it asks for a PIN number, but this number is not included in the documents sent. What do I need to do to get this number?
Contact the NJ state tax department, there are contact emails on their website, try sending an email via the email you lost.
Hello, my question that I cannot find the answer to is this: We have an llc in wy and we received a resale certificate from NJ. When purchasing products from a wholesaler from another state (e.g. Texas), will we receive a desale certificate from that state? If we get a resale certificate in the state where each wholesaler is located, which one will we fill out the ST-50 form in?
Hello,
I applied for a resale certificate in New Jersey State and they gave me my tax registration number. But later I realized that I mistakenly wrote my own name in the business name section. My EIN number is correct but the business name is different. Do you think it will cause a problem? If I need to change it, I don't know where to change it.
It would be beneficial for you to send a support e-mail to the NJ tax department regarding this issue. They will probably assist you in editing your records.
Hello,
I have a Single Member LLC in the state of Wyoming. I received a resale certificate from the state of New Jersey for the intermediate warehouse. I notify New Jersey every 3 months by filling out form ST-50. A wholesaler I contacted asked me to send a resale certificate within Wyoming. The information I want to know from you is, after issuing the resale certificate in Wyoming, do we need to submit a declaration every 3 months like in New Jersey? No matter how much I researched this issue, I couldn't find any results. What is the path I should follow in this regard or is there a link where I can learn the information? Kind regards
Hello,
after receiving a resale certificate in Wyoming, it is necessary to submit a declaration through the state portal every 3 months. There are many step-by-step videos on YouTube about 3-month good returns, you can look at them.
Sir, I couldn't find the answer on the internet, I'm asking you, please excuse me. I sell to Europe, I am from Belgium, but my income goes to the Usan bank and I receive payments from the company via Stripe. Should I make a sales tax declaration to the USA every 3 months?
Hello,
There are state limits, if your turnover exceeds the turnover limits in the states, you must collect and pay sales tax. There is an article on this subject on our blog, you can search it.
Hello;
Is a Business License required for an LLc operating a Software/SAAS business in Delaware?
A business license is not required for this type of business.
Hello;
Is a Software/SAAS company incorporated in the state of Delaware required to obtain a Business License?
Thanks in advance for your valuable answer.
There is no need
Hello, my company is formed in Delaware. I cannot get a resale certificate because there is no sales tax. But is there an alternative document I can present to suppliers to avoid paying sales tax when doing print on demand dropshipping? Or is it possible to get it from another state?
Unfortunately, in order to do tax registration, you must have an llc in a different state. You cannot get it from a different state.
Why did you establish the company in Delaware?
I wish you had set it up in the state of Wyoming.
Try sending the link to the Delaware official website to the place where you will purchase the product.
https://revenue.delaware.gov/business-tax-forms/exemption-certificates/
Hello,
I bought a reseller certificate. I will pay the 60 dollars I have to pay today. I have a few questions before paying, I would be very happy if you could answer them.
1-I was told that I had to submit a declaration to the state of Wyoming even if we did not make sales every three months. Do I need to hire an accountant every three months for this declaration? How is the document presented?
2- Since I will be selling on Amazon, Amazon already collects sales taxes on my behalf and pays them to the state. But on the websites it is stated that we need to collect these taxes and pay them to Wyoming in these three-month periods. I would be very happy if someone who knows about this could shed light on this.
Thanks.
Hello,
Amazon collects sales tax for you, so why did you register with the state of Wyoming?
If your wholesalers require you to register for this tax, that's okay, but otherwise it shouldn't be necessary.
If it is necessary for you to make this record and a statement must be submitted every 3 months, we recommend that you get support from an accountant.
Make an appointment at Turkotaxacc.com, explain your situation and get service from them if necessary. It's probably not a reporting you can do on your own.
Hello Mr. Nazmi,
I registered as explained in the YouTube video in order to reduce the sales tax when purchasing products from wholesalers, but in the e-mail from Wyoming, I was told that declarations must be made every 3 months. I will probably cancel the certificate I received from Wyoming, I haven't paid for it yet. I will choose the state where I will receive the certificate from where the intermediate warehouse is located, that is, according to the wholesaler's requirements.
Greetings, My company single member LLC is formed in Delaware, my physical address is in New Jersey. I set it up just for selling on Amazon. My question is, if I use an intermediate warehouse, will I need a certificate in the state where the warehouse is located?
Hello,
there is an obligation to submit a notification every month in the state where the certificate was obtained. When there was no sale, we were sending it as 0. Since Amazon already collects and pays sales tax when a sale is made through Amazon, should we still report it as 0? Or should we track sales to the relevant state and reflect them in the notification?
Thank you, good job...
Those who deal with Amazon do not declare "0" to any state, but a state that has a sales certificate may ask you to declare "zero" every month, independent of Amazon. Discuss with your accountant what kind of problems you will encounter if you do not declare this, they will give you the most accurate information.
hello. Can a resale certificate be obtained from any state where it is requested?
It may not be available in some states, so you should do your research.
Hello sir, I received an e-mail saying that you cannot get a resale certificate in Wyoming to the virtual address. They say let's write the Türkiye address. My wholesalers may have problems there too. Has anyone encountered such a problem?
Hello,
the residence address of the company owner must be entered in that section because the state secretariat wants to know your place of residence.
The wholesaler cannot access the information entered when registering, so this part of what they say is just superstition, as always.
You enter your address in TR in that section, you are already entering your company address in the other required field, there will be no problem, don't worry, don't believe everything you hear and say, everyone tells you everything.
Sir, won't my Türkiye address be written in the document? As far as I understand, my Türkiye address will be written in the location section, as in the document in the picture in the example. https://www.upwork.com/catalog-images/e776fd670ff3774c82a2576880e4d3a1
They are aware that you do not have a US address anyway and you are asked for your residence address. Even if you want to, you cannot enter your residence address in the company address section. Residence addresses do not appear in this type of documents. If you still want to be sure, you can call the Wyoming tax department and ask. information is here: https://revenue.wyo.gov/
Hello. Can we use our Reseler Certificate outside the state where we received it? For example, I bought it from Wyoming, can I use a wholesaler in New York, right?
If you want to ask your wholesaler company about this issue, as far as we know, some wholesalers accept it, some may not.
Thank you sir for the super fast reply.
We have a reseller certificate, we sell on Amazon and do we need to report the products we sell every month? Or do we report them all at the end of the year? I would be very happy if experiences dealing with Amazon could explain all these processes.
Hello teacher;
I made an agreement with the warehouse for a while. The company is a Turkish company. Maybe you know prepshipping. My company is in Wyoming. I received my sales certificate from Wyoming by following your video. I registered with my wholesaler with my sales certificate. He asked for my shipping address. I gave the address of prepshipping. My wholesaler stated that in order to ship the goods there, I must have a sales certificate from the state where prepshipping is located. How did you overcome this situation? I request your help in this matter.
In the meantime, I'm looking for a warehouse like prepshipping in Wyoming, but I can't find it.
Hello Mr. Tolga,
I also use Prepshipping like you. And I established an LLC company in Wyoming and will receive my sales certificate. I want to buy products from the wholesaler and send them to the warehouse. But I read about the problem you are encountering. How did you find a solution? Did you also get a sales certificate from Georgia, where prepshipping is located? Thanks…
I corresponded with Prepshipping and they said we would buy the products on your behalf. They even set up a website about it; https://wholesaleprepshipping.com . I've never tried it yet. However, this system seems like turning a mill with transport water to me. I plan to send more goods from Turkey. I am working in this direction.
When I search 3PL wherhouse wyoming on Google, something comes up, but I couldn't fully examine it. I thought the worst thing would be to form another company in Kentucky and shop from wholesalers within the USA. Because there is a warehouse in Kentucky. I would be very happy if you find other solutions and share them with me.
best regards
What I'm really curious about is that if we sell the products we purchased with Salex-Tax exemption to someone outside the USA, we naturally cannot receive Salex-Tax. In this case, do we, as the seller, need to pay salex-tax?
Hello,
You do not have to pay this tax on sales for which you do not collect sales tax. Sales tax is collected within the USA and paid at the USA revenue administration.
Hmm, for some reason there are people who claim otherwise. If it is not paid, it seems that the seller must pay. So how can we report this to the US income tax?
If you want to talk to your accountant, these are not questions we can answer.
Let's not mislead, because these are critical issues.
Resale Certificate I formed an llc in WY. But the warehouse will be in NJ. I think I was told that it is necessary to get this document from the place where the products go as resale. I would be happy if you do a detailed review on this subject. Because most people know this wrong. The information is missing and insufficient. Resale Certificate (VAT discount) When we form an llc and supply products from companies, it is a document required for whosale, arbitrage and FBA. In other words, when we buy the product, the company does not charge us VAT. It confirms that we bought it for the purpose of selling it. We sell it to Amazon, which deducts VAT from the final buyer.
Hello Mr. Emre,
Yes, it is a misconception and it is a subject that we have difficulty explaining. Actually, you summarized it and I quoted it below.
"Esale certificate (VAT discount) is a document required for whosale, arbitrage and FBA when we form an llc and supply products from companies. In other words, when we buy the product, the company does not deduct VAT from us. It confirms that we bought it for the purpose of selling. We sell it to Amazon, which deducts VAT from the last buyer."
Generally, this reseller certificate is obtained from the state where the company is formed and the company is registered for VAT in the state. It is necessary to research how you will get this document from where the warehouse is located. It may be necessary to register your WY company as foreign in the state of NJ and register for VAT in the state of NJ. This is the first solution that comes to mind. But of course, for this, it is necessary to research how and from whom to get service.
Hello
Sir, is it possible to get a reseller certificate without a company? Or if we set up a company and sell branded products, will getting a reseller certificate solve the problem if we have a problem?
You can't get it without the company. Your question was answered in a previous comment. Reseller certificate. It is not a document related to selling branded products. Wholesalers require this document and generally treat you as a seller rather than an end user, thus avoiding collecting sales tax. Your issue is not related to this document, you will understand it more clearly when you read it.
Sorry sir, I thought I made a mistake in my first question. So, do we need to get a sales authorization certificate from the brand so that we can sell the brand and not have any problems on Amazon? Thanks
It doesn't matter, it's okay,
We have no experience on this subject, but you can look at the documents regarding copyright and selling branded products in the link below. There you will find answers to all your questions.
https://sellercentral.amazon.com.tr/gp/help/external/201361070
Thank you. Enjoy your work
Hello
Sir, is it not possible to get a reseller certificate without a company?
Hello,
You cannot get it because that certificate is a document given to companies from the state secretariat (state website portal). First, it is necessary to enter the company into the portal and then register for taxes.
All these transactions can only be done with an llc that has an EIN.
Hello, I founded my company in the state of Delaware. There is no sales tax in the state of Delaware, so there is no resale certificate. Now what can I offer if a wholesaler asks me for this? Or can I get it from another state? Thanks a lot
Hello,
Sales tax exemption certificate (i.e. resale cert.) is not available in the state of Delaware. Since there is no tax exemption in a state without sales tax, there will be no certification for this. This certificate is obtained from the secretariat of the state where the company is established. Since you do not have a company or formation in another state, research how to obtain this document for another state in a foreign state.
Therefore, those dealing with amazon prefer the state of Wyoming as the resale certificate is issued free online in WY. Why did you form your company in the state of Delaware?
I sell through Shopify, my company is based in Wyoming. Do I need to get a resale certificate when I am going to sell to Wyoming state? I have now sold to another state. When applying, it is said that you need to apply without making any sales. Do you have any information about whether the sales there mean not to sell to the state of Wyoming?
You should get this document if your supplier pushes you, it is not a document you should normally get. Generally, those who are interested in Amazon buy wholesalers and suppliers because they demand it.
Sir, I may be confusing the concepts, I'm sorry. Since I formed an llc in Wyoming, I know that I have the obligation to collect sales tax from the sales I make in the state of Wyoming. I think I need a Reseller License document in order to pay sales tax. I wrote the wrong document 🙂 . It is necessary not to have made any sales in order to obtain this document. Do you have any information about this situation, probably related to not having made any sales in Wyoming?
Astagfurullah, no problem, but I think you are on the wrong track again. You can collect sales tax, but after the limits are reached, you must repay the sales taxes you collected to the state from which you collected them. For this, instead of getting a reseller license, you need to register for the "Sales Tax Permit" in the state of Wyoming, I think it costs $60 and it takes 10 days to apply through the state portal. the two are different from each other. Actually, it would be more logical to get support from a professional for this, but if you think you will check it yourself, do some more research. I have left a few links below;
https://www.taxjar.com/blog/file/how-to-register-for-a-sales-tax-permit-in-wyoming
https://thetaxvalet.com/blog/how-to-register-for -a-sales-tax-permit-in-wyoming/
Good luck!
Hello!
Is there a difference between this Business License or Reseller License and articles of organization?
Articles of organization is the company formment document. Business license is a permit obtained from the state for some types of business. For example, alcoholic formments, shops etc. that require some licenses.
We incorporated an llc in the state of Wyoming and received our EIN number. Do we need to contact an agency to obtain the Reseller License document or can we apply ourselves? If we can find it, from which site do we need to log in? I did a little research but I always come across agencies.
Hello,
In Wyoming, you can get the reseller certificate from the state website. You do not need to pay the agency.
When I did a short research, I came across a video in which this process was applied step by step in Turkish. By applying this, you can obtain it yourself in a short time.
I leave the link: https://youtu.be/shz07YaoD1g
Good luck!
Hello,
where and how to get a business license? I heard that this document can be used instead of a utility bill. Is there an original? Do you have any information?
You can get this document from the state where you do business so that you know that you need to collect sales tax when you use it to buy products. By the way, this document is not an invoice, I have no idea how to use it as verification. I don't know where you heard it, but you should research it thoroughly if you want.