Why do we need your EIN? We require EIN to prove you are a business before allowing you to purchase items as wholesale prices and for the purpose of filing taxes.
What’s an EIN? A federal employer identification number, or EIN, is a nine-digit number the IRS assigns to businesses for tax filing and reporting purposes. The IRS uses the EIN to identify the taxpayer. You can think of an EIN as the equivalent of a social security number, but for a non-living entity like a business.
Sales Tax ID Number
What’s a Sales Tax ID Number?
Depending on the state you live in, it can also be called a reseller’s permit, reseller’s license, reseller’s certificate, resale license, sales tax ID or sales tax permit.
It helps you avoid paying tax that you do not need to pay. The resale certificate works in favor of the reseller, which is why we require that you have one to do business with us. Before you start selling, you should apply for a sales tax permit in your state (assuming your state has sales tax, of course). In most states, you can apply online and the process is free.
Why do I need a Sales Tax ID Number?
In general terms, getting a sales tax permit with your state is a requirement for doing business. Anytime you make a sale to a customer in your same state, you should be collecting sales tax. You then periodically remit this money to your state and/or local government.
Fortunately, being known to your state government has also got its perks. If you purchase business goods or supplies from a wholesale seller, you can usually provide your sales tax ID not required to pay sales taxes on your purchase. If you want to attend a trade show or shop at certain wholesale supply websites online, you might be asked for your sales tax ID number or to show your sales tax permit.
Sales tax nexus
A sales tax nexus “also known as sufficient physical presence, is the determining factor of whether an out-of-state business selling products into a state is liable for collecting sales or use tax on sales into the state”. The term “sufficient physical presence” is what confuses most people and with reason – this rule can also vary between states. The simple rule to remember is that you have a nexus in a state if you do any of the following in that state:
- have an office
- have a warehouse
- have an employee
- have an affiliate
- store inventory
- temporarily do physical business – trade show, fair, etc.
- drop-shipping from a 3rd party provider
The rule to abide by is that you should collect sales tax for a state if you have a nexus present there. Here’s a list of states and what creates a nexus in each. https://blog.taxjar.com/sales-tax-nexus-every-state/