How to Obtain Wholesale License in Texas
If you're wondering how to obtain a wholesale license in Texas, you'll first need to register your business.3 min read
2. Obtaining a Sales-Tax License
3. Obtaining a Wholesale License
4. Reasons to Get a Wholesale License in Texas
5. Licenses, Permits, and Registration for Texas Businesses
6. Applying for a Texas Sales Tax Permit
Updated October 7,2020:
If you're wondering how to obtain a wholesale license in Texas, you'll first need to register your business. A wholesale license is required if you plan to buy products wholesale and sell them in smaller quantities.
Registering Your Business
To register your business, contact the IRS and apply for an Employer Identification Number (EIN). It's free to apply and will take between four and five weeks to receive your EIN once you've applied. You can also file online to expedite this process. An EIN is the equivalent of a Social Security number for businesses. After you have a valid EIN, you can hire employees and start conducting business.
Obtaining a Sales-Tax License
Once you've registered your business, the next step is to obtain a sales-tax license to charge sales tax on the items your business sells. Sales tax percentage, terms of the license, and application fees will vary depending on where you live. Contact the Texas tax office to apply for a sales-tax license.
Obtaining a Wholesale License
To obtain a wholesale license, contact the Texas tax or revenue office to find out application fees and complete the application process. Once you have registered your business as a wholesaler, your business will not have to pay sales tax on items that you plan to resell. To find out which exemptions your business is eligible for with a wholesale license, it's a good idea to consult with an accountant or lawyer.
A Sales Tax Permit is required in order to sell goods or services in Texas. It will take approximately four weeks to get your permit after completing the application.
In Texas, you are required to complete a wholesale certificate when buying goods for wholesale. This wholesale certificate keeps track of your core business activities and the goods your business purchases.
Reasons to Get a Wholesale License in Texas
A wholesale license is referred to as a Sales and Use Tax Permit in the state of Texas. It is required for businesses in order to collect sales taxes on transactions. By getting a Sales and Use Tax Permit, businesses can purchase products directly from manufacturers, suppliers, and distributors at wholesale prices without paying sales tax.
Businesses are tax exempt when buying wholesale goods because customers are taxed at the point of sale. Businesses then pay taxes to the state.
Another reason to consider obtaining a Sales and Use Tax Permit is that manufacturers, suppliers, and distributors want to make sure they are selling to a business and not directly to customers.
Licenses, Permits, and Registration for Texas Businesses
Since each municipality has its own regulations, your county or city may require more specific licenses or permits. Some permits you may need are:
- Alarm Permit
- Building Permit
- Business License
- Tax Permit
- Health Permit
- Occupational Permit
- Signage Permit
- Zoning Permit
You must register a sales permit tax in Texas if you are an online seller who:
- Is an individual, partnership, organization, or corporation doing business in Texas AND
- Sells tangible personal property or provides taxable services to consumers in Texas AND/OR
- Acquires physical personal property or services from a supplier outside of Texas that doesn't hold a Texas permit.
Businesses can register online for a Texas sales tax permit through the Texas Comptroller of Public Accounts website.
In order to register for a sales tax permit in Texas, you'll need the:
- Sole owner or partnership's social security number or EIN.
- File number of the Texas corporation from the Texas Secretary of State.
- Each officer's or director's social security numbers within a corporation.
- North American Industrial Classification System (NAICS) code.
To apply, you must be 18 years of age or older, though parents and/or legal guardians can apply on behalf of a minor.
Applying for a Texas Sales Tax Permit
Through applying for a Texas sales tax permit is free, a bond may be required after the application has been filed and reviewed.
It usually takes taxes between two and four weeks to receive a sales tax permit after the Texas Comptroller of Public Accounts has received the completed application. Once you have your Texas sales tax permit, you won't have to have it renewed.
If you are not a sole proprietor in Texas, you will need to file a Texas Franchise Tax form annually. If you earn less than $1,080,000 in sales per year, you can file a 'zero return' on this form.
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