What a reseller's license is and why you need one

A reseller's license (also called a resale certificate or resale permit) is a document that lets you buy goods wholesale without paying sales tax, as long as you resell those goods to customers. When you resell them, you collect sales tax from your buyer and send it to your state — not to the wholesaler you bought from.

You need one if you plan to buy inventory to resell, whether that's clothing, electronics, crafts, or any other product. Without it, you pay full retail price plus sales tax on every wholesale purchase, which cuts into your profit. With it, you buy at wholesale prices and only pay tax on the final sale to the customer.

The license itself is free or costs a small fee (usually under $50). The real requirement is that you have a legitimate business structure — a sole proprietorship, LLC, corporation, or partnership — and a business tax ID number from your state.

Key Takeaways

  • You need a business tax ID number from your state before you can get a reseller's license; this is separate from a federal EIN.
  • Most states issue reseller's licenses through the same office that handles sales tax registration, usually called the Department of Revenue or Department of Taxation.
  • The process asks for your business name, address, type of business, and the types of goods you plan to resell.
  • Processing takes anywhere from a few days to a few weeks depending on your state; some states issue it when ready online.
  • Once you have the license, you give the number to wholesalers instead of paying sales tax on your purchases.

Get your business tax ID number first

Before you explore for a reseller's license, your state needs to know you exist as a business. You do this by registering for a state business tax ID number (sometimes called a state tax ID or state employer ID). This is different from a federal EIN — you may need both, but the state ID comes first for reseller purposes.

Go to your state's Department of Revenue website (search "[your state] Department of Revenue" or "[your state] Department of Taxation"). Look for a section on business registration or new business. Most states let you register online in 10 to 15 minutes. You will need your Social Security number, the business name you want to use, your address, and a description of what you plan to sell.

Some states issue the tax ID number when ready; others mail it to you within a week. Keep this number — you will use it on the reseller's license process.

Find your state's reseller's license process

The office that issues reseller's licenses is usually the same one that handles sales tax. Once you have your state tax ID, go back to your state's Department of Revenue website and search for "resale certificate," "reseller's license," or "resale permit." The exact name varies by state.

Some states call it a "Certificate of Resale" or "Resale License." A few states (like Texas and Florida) use different terminology but the function is the same. The process is almost always available as a PDF you can print and mail, and many states now offer online registration.

If you cannot find it on the main website, call the Department of Revenue directly — the number is on their website. Tell them you need to register as a reseller, and they will direct you to the right form or online portal.

Complete the reseller's license process

The process is straightforward. You will be asked for:

  • Your business name and the name it will appear under on invoices
  • Your business address (can be a home address if you are starting from home)
  • Your state business tax ID number
  • The type of business (retail store, online seller, wholesaler, etc.)
  • The types of goods you plan to resell (clothing, electronics, food, etc.)
  • Whether you have employees

Be honest about what you plan to sell. The state uses this to make sure you are not trying to resell items that are taxed differently or that require special licenses (like alcohol or tobacco). If you plan to sell multiple categories, list them all.

Some states ask you to describe your suppliers or where you will buy inventory. You do not need to have contracts signed yet — just show that you have a plan to source goods wholesale.

Submit your process and wait for approval

If you are explore by mail, print the form, sign it, and send it to the address listed on the form. Include a copy of your state tax ID letter if you have it. Processing by mail usually takes two to four weeks.

If your state offers online registration, you can submit it when ready and often get a temporary license number the same day. Some states email you a PDF of your license within 24 hours; others mail a physical certificate.

Once approved, you will receive a reseller's license number. Write this down and keep it safe — you will give this number to every wholesaler you buy from instead of paying sales tax.

Use your license when buying wholesale

When you contact a wholesaler or distributor to set up an account, they will ask for your reseller's license number. Provide it, and they will remove sales tax from your invoice. You only pay the wholesale price.

Keep copies of all invoices showing your reseller's license number. At tax time, you will need these to show that you bought goods for resale (not for personal use). You will also need to file sales tax returns with your state showing the tax you collected from customers.

If you buy from a wholesaler in a different state, the rules can be more complex. Some states require you to have a reseller's license in that state too, or they may have different rules about out-of-state resellers. Ask the wholesaler or check your state's Department of Revenue website for guidance.

Renew your license when required

Most states require you to renew your reseller's license every one to three years. Your state will send you a renewal notice by mail or email before it expires. The renewal is usually free or costs the same small fee as the original.

If you move, change your business name, or stop selling certain types of goods, update your license information with the state. Some states let you do this online; others require a new process. Check your state's Department of Revenue website for the renewal process specific to your state.

Frequently Asked Questions

Do I need a reseller's license if I sell on eBay or Etsy?

Yes, if you are buying goods wholesale to resell on those platforms. The platform does not matter — what matters is whether you are buying inventory for resale. You still need to collect sales tax from customers in most states and file sales tax returns.

What happens if I buy wholesale without a reseller's license?

You will pay full price plus sales tax on every purchase, which defeats the purpose of buying wholesale. If you misrepresent yourself as a reseller when you are not, the wholesaler could refuse to do business with you or pursue legal action, though this is rare.

Can I get a reseller's license if I work from home?

Yes. Your business address can be your home address. Some cities require a home business permit in addition to the reseller's license, so check your local city or county website to see if you need one.

How long does it take to get approved?

Online applications are often approved the same day or within 24 hours. Paper applications by mail take two to four weeks. A few states take longer if they need to verify your information, but most process quickly because the requirements are straightforward.

Do I need a federal EIN to get a reseller's license?

Not always. If you are a sole proprietor (self-employed with no employees), you can use your Social Security number. If you have an LLC, corporation, or employees, you will need a federal EIN from the IRS. Check your state's requirements, but the state tax ID usually comes first.