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Business License Vs Seller’s Permit: What The Difference?

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A seller’s permit (also known as a sales tax license, retail license, sales and use tax permit, vendor’s license, or sales tax permit) is a business license that allows you to collect sales tax on taxable goods and services you sell or lease, including properties if selling regularly.

Seller’s permits are state and (depending on your location) local-specific; once you collect sales tax, you pay it to your state and local tax authorities.

Seller’s permits exist to enable the state you do business in to control the collection, reporting, and paying of sales tax to raise revenues, which they use to fund government services and programs such as healthcare, education, and transportation.

And as sellers’ permits are state-specific, you might need one in every state you do business in. 

Each state has specific requirements for which companies need a seller’s permit, but most businesses need one when they make 3 or more sales in 12 months.

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