How to Get a Wholesale License for Clothing
People who want to start to buy wholesale clothing and begin their clothing business at home are often so eager to start a business that they usually forget a critical step: make sure they have all the licenses and permits required to legally run a new business. Then, it may occur to you "Do I Need a Wholesale License to Buy Wholesale" or "How to Get a Wholesale License for Clothing".
Table of Contents
Register Your Business and Get an EIN
Obtain a Sales Tax License and a State Tax ID number
Some FAQ about Wholesale License
- 1. Do I Need a Wholesale License to Sell Online?
- 2. What Kind of License Do You Need to Buy Wholesale?
- 3. What's a Wholesale License?
- 4. How Much Does a Wholesale License Cost?
No matter you buy wholesale for personal use or for a large company, if you don't have sufficient permission, you will not be able to continue the following steps, which may cause major problems and can't make money in the future. The last thing you want to do is to make your business run successfully. You don't want to hear that one day your business was shut down by a government agency because you don't have the necessary permits. It is quite worth the time and small investment to ensure that you have all business licenses at the beginning.
Once you get a business license and become a licensed wholesaler you will find a world of opportunities, which is quite beneficial for you and your business. So read the following steps, FondMart’ s blogs will give you the best answer to "How to Get a Wholesale License for Clothing".
Register Your Business and Get an EIN
The Internal Revenue Service (IRS) has established rules and regulations that must be followed in order for companies to make wholesale purchases. To ensure that you comply with local, state, and national tax laws, please read on to understand what you need to prepare as a wholesaler for your business.
Before you can acquire a wholesale license you have to contact the IRS to apply for an EIN. The EIN is the Employer Identification Number which is also known as Federal Tax Identification Number.
Before you can obtain a wholesale license, you need to legally register your business. Generally, this means applying for an Employer Identification Number (EIN) from the IRS, also known as a Federal Tax Identification Number. Your EIN is what allows you to legally conduct business and hire employees. Applying for this number is necessary even if you do not plan on hiring other people.
The application process for an EIN can take up to two weeks. Once you have received the number, you can legally do your business.
Now that you know that you need to obtain a tax identification number or EIN for your business, you need to apply for it. IRS makes it really easy to apply for and obtain a tax identification number. Please read the following instructions and follow the steps below to get your tax ID/EIN successfully:
1. Visit http://www.irs.gov and complete a short application on the "EIN Assistant" page. You can also apply by phone, fax or email, but if you apply online, you will receive your EIN immediately after completing the application. So we recommend you complete the application online and you will get your EIN sooner than the normal way.
2. Make sure which type of EIN you want to apply for. It can be a sole proprietorship, limited liability company, partnership, real estate or company. The online application will also ask for your name and social security number to complete your request. Thus, before starting your business, you have to guarantee your identification is qualified to begin a clothing business.
3. After completing the application, you will receive an official IRS document which will tell you that you have successfully applied or not. And if you are successful in applying for the EIN, they will provide your new tax ID/EIN. Remember to save this file for your records (in case you forget your tax number).
You may ask is it a necessity, but companies buying wholesale do need to have a tax number. Legally, when you buy from a wholesale manufacturer or distributor, you must provide this number. The US Internal Revenue Service will send your tax number after confirming that you are a legitimate business that meets the tax exemption conditions, which means you can start your business.
To buy wholesale clothing, the wholesaler will ask you to provide a tax number when you place an order. Besides, wholesale companies must keep these tax numbers on file to prove that they only sell products to verified customers.
Don't worry about the money, because this is completely free. Generally, it takes up to 4 to 5 weeks to receive the Employer Identification Number. When this step is completed you should begin with the following steps.
Obtain a Sales Tax License and a Sales Tax number
After you've received your EIN, the next step is obtaining a sales tax license. This license is what allows you to charge sales tax on the products you sell. The specific licenses and the percentage you will need to charge your customers vary from state to state. To find out more and to apply for the license, you should contact your state's tax office to apply and acquire a sales tax permit in order to charge sales tax on the items you sell.
In most states in the US, a tax ID number is not the same as a sales tax number. While tax IDs are sent by the IRS at a national level, sales tax ID numbers are issued by states to businesses, which allows them to charge sales tax on their products or services. The department of revenue, or a similar agency in the state where the business resides, gives the sales tax ID number. This tells that your business is allowed to collect sales tax.
If your company moves from one state to another, they will keep the same tax ID number but you may have to register for a new sales tax number in the new state according to different laws in different states. Once you finish the application process you will be able to engage in business activity.
Keep in mind, that some states use a company's tax ID number as their sales tax number. You still have to register according to the state agency. Remember to check with your state's revenue agencies, since this varies from state to state.
Apply for a Wholesale License
After finishing the previous steps, you can contact your state's tax or revenue office to apply for and obtain a wholesale license.
Applications and fees will vary depending on where you live. Keep in mind that once your business is licensed as a wholesaler, you will be exempt from paying sales tax on the products that you are buying wholesale with the intention to resell. But we recommend you consult with your lawyer or accountant about the details. With professional answers, you can find out what exemptions you're eligible to receive with a wholesale license.
In summary, to apply for a wholesale license, you first need to register your business by contacting the IRS and submitting an application for your Federal Tax Identification Number.
Next, you need to apply for a sales tax license and Tax ID number to charge sales tax on your products or services.
Finally, you need to contact your state's tax and revenue office to obtain your wholesale license.
Generally, this will help you solve the problem of "what license do I need to buy wholesale clothing" o "what type of license do I need to sell wholesale clothing".
The previous steps generally can solve your problems. However, keep in mind that some states require additional licenses and permits to buy or sell wholesale goods. For example, if you want to do business in Maryland, California, or Illinois, you need to apply for a wholesale license because these states do not accept out-of-state resale certificates.
Buying goods wholesale and reselling them through your business is a great way to increase profits. However, you need to obtain the necessary licenses according to the laws and regulations with the IRS and any state or local laws.
After you get your wholesale license, it strikes you that How to Start a Clothing Business with Buying Wholesale or Where to Buy Wholesale Clothes: Everything You Need to Know for the following steps.
Some FAQ about Wholesale License
1.Do I Need a Wholesale License to Sell Online?
Yes, you need a license for selling wholesale, whether you sell your products at a brick and mortar store, an internet company, you'll need a wholesale license to buy from a wholesaler. This license will give you legal permission to purchase items in bulk from suppliers and manufacturers and resell them to your customers. One of the biggest bonuses of this license is that you will not be required to pay sales tax for the goods you are selling to others.
Another benefit of getting a wholesale license is that it helps customers and suppliers see you as an honest, dependable and trustworthy wholesaler. It will make them know that they are dealing with a company or a person that will do their best to market, and sell their products. They will also be ensured that you are a business that complies with local, state and national laws and follows the proper regulations to resell wholesale products.
Otherwise, you will need to pay sales tax on the products you buy wholesale, cutting deeply into your profits.
2.What Kind of License Do You Need to Buy Wholesale?
In order to buy wholesale clothing, you will need to obtain a wholesale license, which depends on the state where your business is located, it could also be called a seller's permit, a resale ID, wholesale ID, retail ID or a reseller's license.
However, to get a wholesale license, you first need to have a few other items in place. Your business needs to be registered with the IRS and you will need to have an Employer Identification Number (EIN). You will also need a sales tax license, a state tax ID number before you can apply for your wholesale license. More details on obtaining these items are included in the previous section.
3.What's a Wholesale License?
A wholesale license is a permit that allows you to legally sell various wholesale products without paying sales tax on the items, which helps you save money. You can obtain this permit from your state's tax or revenue office.
4.How Much Does a Wholesale License Cost?
For example, a wholesale license in the US can cost between $3,000 to $10,000. However, the concrete money is depending on the type of license and the places where you are.
Remember to contact the IRS to inform yourself about which licenses you might need to operate your business legally, for laws vary depending on the state and the type of business you want to run.
5.Shop Wholesale Products for Resale at FondMart
FondMart is the leading wholesale platform for women's clothing and women's plus size clothing. Whether it's top quality or the latest style, we have it all right here in our extensive collection. Our customized service like private label service and NO MOQ service will give you the best experience.
Click FondMart and start your business! If you have more questions, please read our Wholesale Tips, Dropshipping Tips and FAQ and we hope you will find what you want.
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