Starting a Business

Why is it important to have a resale license in the surplus and salvage business?

min read
Opinions expressed by Entrepreneur contributors are their own.
Generally, any time you sell goods to someone else you have the obligation to charge sales tax, and to remit the amount collected to the state sales tax authorities. Failure to do so can land you in serious hot water.

However, that's not always the case if you are selling goods to someone who will be "reselling" the goods to a third party. For example, if you're a shoe manufacturer, you may be selling your shoes to outlets, which in turn will be selling them to customers. As long as you can verify that the outlet company has a resale number, the obligation to collect sales tax from the customer then falls on the outlet.

Sales taxes can get very tricky, so make sure you consult with an accountant who knows this area well.

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

It Started As a Joke and Turned Into a Startup That Raised $1 Million in Funding