Msg#: 3356175 posted 8:37 pm on Jun 1, 2007 (gmt 0)
I've been calling some wholesalers and they keep asking me to send them a copy of my "resale certificate". I understand that this certificate says that my wholesaler won't charge me sales tax and then I have to pass the sales tax on to my customers.
My ecommerce site will be selling to other US states and to international countries. I won't be doing business in the state that I reside in; so my question is do I still have to collect sales tax? I thought the only state that I would have to collect sales tax is in the state that I operate in, right?
If this is the case then why do I need a "resale certificate" to setup an account with a wholesaler if I'm not doing business in my state as of now?
Msg#: 3356175 posted 8:46 pm on Jun 1, 2007 (gmt 0)
Most likely becuase each wholesaler can't possibly know in which states the people they sell to operate. I'm not sure, but they be legally obligated to charge sales tax to everyone who doesn't have a resale certificate.
Msg#: 3356175 posted 3:14 pm on Jun 2, 2007 (gmt 0)
The real reason that wholesalers ask you for a resale certificate or sales tax certificate is to verify that you are a legitimate business and not an individual who wants to make a one time purchase at a wholesale price.
It's simply not profitable enough for many wholesalers to deal with the public.
Msg#: 3356175 posted 7:58 pm on Jun 4, 2007 (gmt 0)
In the past, I often could not put my hands on my resale certificate, so I would just make up a number to use. It always worked except once, when a company in my state wanted the actual copy of the resale certificate faxed to them. I decided that even though I by then had actually located my resale certificate, it was not worth my while to do business with them. None of the manufacturers I have dealt with in the past seven years have ever asked me for a resale certificate, and none of the actual wholesalers who have a significant minimum have ever asked me for a resale certificate. I have found that almost inevitably, someone asking for a resale certificate or number or whatever is offering you the opportunity to buy stuff at 50% off. That is not wholesale as far as I am concerned. Wholesale starts at 70% off, IMO. But my neck of the woods is chock full of companies offering this kind of "wholesale."