Benefits of Getting a Seller’s Permit for Your Business
Seller’s permit is a licensing certificate that gives businesses the leeway to collect sales tax on each and every sale or lease of products online or offline. This tax is collected and is then submitted to the concerned government authority monthly, quarterly or annually. Why must a business entity apply for a seller’s permit and what are the benefits of having a seller’s permit in your possession? Let’s find the answers to all such questions here.
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Why Is Applying for a Seller’s Permit so Important?
It can be quite confusing for new business entities to know all the licenses and permits that they must apply for when they first start out. If we take the example of a state like California, any business entity has to necessarily apply and get a California seller’s permit if they are selling or leasing tangible goods and services.
Hence it is not an optional choice but a mandate as per the state laws of most US states. The application form is present on the California Department of Tax and Fee Administration (CDTFA) website along with the names of all the additional documents that are needed for the successful completion of the seller’s permit application. If a new organization starts to conduct business without the seller’s permit, they are liable to cough up certain fines and penalties or even serve jail time.
Thus it is of utmost importance for new businesses to go through the state laws and guidelines regarding such permits and licenses before actually starting to conduct any business.
What Are the Benefits of Getting a Seller’s Permit?
As mentioned above, getting a seller’s permit is a mandate in some states and not required in others. However, there are certain advantages and benefits that are attached to this permit that the businesses enjoy. Let us go through them here.
Easy Collection of Sales Tax
The first benefit of getting a seller’s permit is the completion of the action that it authorizes the business with. In simple terms it means that the business can now collect sales tax on each sale or lease of property which is what the seller’s permit allows the business to do in the first place. The sales tax collection and submission to the state authority is the main motive and it needs to be achieved at all costs so that the business can avoid any criminal charges against it.
For Legal Protection
A new business is a work in progress which means it is still learning to stand on its own two legs. If then anything goes wrong in the legal sphere the failure of the organization becomes unavoidable. To then protect the company and to ensure that it is running within the stipulated legal guidelines of the state of business, it is best to get a seller’s permit for it.
A seller’s permit is an absolute necessity in most states except for Alaska, Delaware, Montana, New Hampshire and Oregon. So this benefit is attached to the action of applying for the permit and following the right guidelines of the state authorities.
Access Wholesale Benefits
If a business wishes to work with wholesalers it is good if they can boast of having a seller’s permit in the state that they are running their business in. If the business is running in multiple states, then the organization must always apply for a different seller’s permit in each state.
When the business entity has a seller’s permit, they get a stamp of legitimacy and the vendors recognize them as an actual business. Hence, if you wish to get wholesale benefits in future or at this point in time, then applying for a seller’s permit should be the first thing on your to do list.
Improve Credibility Of Business
As mentioned right before this, a seller’s permit lends credibility to the business that is running. Other vendors and entities recognize the presence of such up and coming business ventures and increase the trust of the brands and the customers in it as well. Businesses with a physical or offline structure often even paste the seller’s permit somewhere on the walls or the door to earn the trust of every patron that enters.
Avoid Fines and Penalties
What also happens when a business entity has a seller’s permit in their possession is that they avoid any fines or penalties or even prison time that would have been levied on them if they didn’t have it. So if you are a business who wants to avoid the same, be sure to apply and get your seller’s permit today!