If you want to learn more about Texas reseller permits, read this blog post. We’ll tell you where to get this permit, how to fill out the form, and how much it will cost.
In addition to that, we’ll inform you what details are included in this credential.
Until then, let’s understand what this certificate is all about and who requires it the most.
Texas Tax Resale Certificate Online
Both new and existing resale businesses in Texas require a permit. It doesn’t matter whether it’s an individual, LLC, corporation, or partnership-owned company.
The certificate allows resellers to buy goods without paying sales tax on them. Moreover, it lets suppliers know you’re legally allowed to purchase items without charging you sales tax.
Introduction to Reseller Permit in Texas
In Texas, resellers with a license don’t pay sales tax on items they purchase from a vendor. However, the sale tax will still be paid, but not from their pocket.
The reseller will collect sales tax from their customers on the final value of the commodities. Next, the collected taxes will be forwarded to the Texas Controller of Public Accounts.
Meanwhile, you must know that this license is only used on inventory that will be resold. It shouldn’t be used to purchase tax-free items in everyday business operations.
The sole purpose of this certificate is to provide evidence of why sales tax wasn’t collected on a transaction.
Who Needs a Reseller Permit in Texas and Why?
As someone in business or planning to open one, you’ll need to know who needs this credential in Texas. This will ensure you run your venture on legal grounds.
Additionally, it will prove your local, state, and federal compliance.
Now, the question is, who should obtain a reseller permit in Texas? Anyone who plans to sell or lease tangible goods or personal property needs such a document.
When we say tangible items, we refer to goods that can be felt, measured, weighed, or seen. Such things include furniture, toys, working tools, clothing, computer equipment, etc.
Furthermore, you’ll require this license if you have a sales room, warehouse, or sales representative.
Those operating canvassers, telecommunications, internet access, insurance, or data processing in Texas will also apply.
Who is Exempted from Using Reseller Permit in Texas?
You must know that certain business entities don’t need a reseller permit in Texas.
One of them is an independent sales representative of a direct sales organization. Those who want to purchase items at wholesale prices may not need this license.
Finally, people are registering for an Ag/Timber Exemption Number to buy things used in the production of agricultural timber products.
How to Get a Reseller Permit in Texas
The steps to filling this blanket are straightforward. It won’t take you ten minutes to input all the details according to the instructions.
You’ll start by downloading the Texas Sales or Texas Resale Certificate Form. The form will require the details of both the purchaser and the seller.
Right at the top, you’re to insert the buyer’s details. These include name, firm or agency, address, and contact line. You’ll also be required to enter the Texas sales tax number.
If the buyer is out-of-state, you should include their state’s sales tax permit number.
The section below will require the seller’s details. You can insert the name, street address, and sales tax and use the tax permit number here.
Similarly, if the seller is out-of-state, you must provide their state’s sales tax license number. Moreover, you’ll input the description of the items to be purchased. Then describe what the buyer’s enterprise sells.
Finally, the buyer will certify that the merchandise bought is for resale. The buyer has to confirm the certification with a signature and date.
After you’ve done that, you’re to keep the document with you. It’s to be presented to the vendor when you want to purchase.
Note: The completed certificate should not be sent to the controller of the public account.
Cost of Obtaining a Texas Reseller Permit
It will cost you some money to acquire this credential in other states. But this isn’t the case with Texas. There’s no cost for a resale permit.
You’ll only need an internet connection to download the form.
How Long Does it Take to Earn Texas Reseller License?
You must also find out if this authorization expires in Texas. Of course, some business licenses do require renewal after a fixed period.
Luckily, the Texas sales and use tax resale certificate doesn’t expire. However, you must periodically request a new form to maintain your current details.
You can do that either annually or after a few years.
End Date for Sales Tax in Texas
Generally, new businesses in this state are required to file and pay sales and use tax monthly.
However, certain companies have an annual filing requirement for collecting taxes. Therefore, you must check with the relevant department to know when your business type should file and pay taxes.
Is it Appropriate for Sellers to Accept Reseller Permit in Texas?
No. Like most states, sellers aren’t required to resell certificates for tax-free purchases.
Unfortunately, most of them accept this credential. If a vendor refuses to accept this certificate, the buyer will cover the sales tax on purchased items.
Tips for Accepting a Texas Resale Certificate
Most sellers need help verifying the authenticity of this license when presented with one. Failure to check if the details on a reseller permit are correct has consequences.
The liability for paying Texas sales taxes will be on the seller. Therefore, you must take precautionary steps when issuing such a document.
First, review the reseller permit to ensure it’s filled out. Next, verify if the buyer has a legitimate sales tax permit. You can check by visiting the Texas Controller of Public Accounts taxpayer database.
Moreover, you must examine the certificate and evaluate if the items sold are consistent with the buyer’s line of business. Finally, keep the reseller permit and record tax-free purchases for some years.
That way, you’ll avoid falling victim to paying fines or outstanding sales tax.
Every business in Texas must hold a reseller permit. Besides enjoying a tax-free purchase, you’ll protect your company from fines and other legal penalties.
So as you plan to do business in this state, ensure you hold this credential. You’ve found this article informative and educational.