What is a Reseller’s License?
A reseller’s license, also known as a resale certificate or sales tax permit, is a document that allows individuals or businesses to purchase goods or services for resale without paying sales tax. It is issued by the state’s taxing authority and is required for anyone engaged in selling tangible goods or certain types of services.
Why Do You Need a Reseller’s License in Illinois?
In Illinois, a reseller’s license is required if you plan to sell tangible goods or certain services. It allows you to buy products from wholesalers or manufacturers without paying sales tax, as you will be collecting sales tax from your customers when you make a sale. It is important to note that a reseller’s license does not exempt you from other taxes, such as income tax or federal taxes.
How to Obtain a Reseller’s License in Illinois?
To obtain a reseller’s license in Illinois, you need to follow these steps:
- Register with the Illinois Department of Revenue (IDOR): You can register online through the IDOR website or by filling out Form REG-1, Illinois Business Registration Application. You will need to provide information about your business, including your business name, address, and federal employer identification number (FEIN).
- Apply for a reseller’s license: Once you have registered with the IDOR, you can apply for a reseller’s license. You can do this online through MyTax Illinois or by filling out Form ST-5, Sales Tax Resale Certificate. You will need to provide your business information and your Illinois Business Tax number (IBT).
- Submit the required documents: Along with your application, you may be required to submit additional documents, such as a copy of your FEIN letter from the IRS, proof of business ownership, or a copy of your lease agreement.
- Pay the necessary fees: There may be a fee associated with obtaining a reseller’s license in Illinois. The fee can vary depending on your business type and other factors. You can find information about the fees on the IDOR website.
- Receive your reseller’s license: Once your application and documents are reviewed and approved, you will receive your reseller’s license. It is important to keep this license in a safe place and display it prominently at your place of business.
Renewing Your Reseller’s License
A reseller’s license in Illinois is valid for a period of five years. You will receive a renewal notice from the IDOR a few months before your license expires. To renew your license, you need to follow the instructions provided in the renewal notice and pay the necessary fees. It is important to renew your license on time to avoid any penalties or disruptions to your business operations.
Conclusion
A reseller’s license in Illinois is a crucial document for anyone engaged in selling tangible goods or certain services. It allows you to purchase products for resale without paying sales tax, while still collecting sales tax from your customers. By following the necessary steps and fulfilling the requirements, you can obtain and renew your reseller’s license in Illinois, ensuring compliance with the state’s tax regulations.