Sales Tax Collection: Businesses with a seller's permit are responsible for collecting sales tax from customers on taxable items. The collected tax is then submitted to the state.

State-Specific: Seller's permits are issued by individual states, and the requirements for obtaining one can vary from state to state.

Who Needs One: If you're selling physical goods (or certain services) and you're required to collect sales tax in your state, you'll likely need a seller's permit.

Wholesale Purchases: Having a seller's permit may also allow a business to purchase goods at wholesale prices without paying sales tax, as long as the goods are intended for resale.

Below are the state's websites for information on how to get a seller permit

Retailer Responsibility for Sales Tax
Any customer selling products online is legally considered a retailer. Since 2012, all retailers are required to collect and remit sales tax to the state where the product is being sold.

Nexus and Seller's Permits

DCL clients are subject to "nexus" because their inventory is stored in California, Kentucky, or Pennsylvania. This nexus status legally requires them to obtain a seller's permit in each respective state and remit the collected sales tax directly to that state. Even if products are shipped to states without sales tax, a seller's permit is still necessary because the inventory is stored in states that enforce sales tax regulations.

Audit Compliance
DCL requests the seller's permit number to provide validation during audits conducted by the Franchise Tax Board (FTB). Since DCL is not the seller, we are not responsible for remitting taxes to California, Kentucky, or Pennsylvania. However, we must ensure our clients comply with state tax laws.

Sales Tax Collection by eCommerce Stores
All eCommerce stores should be programmed to collect sales tax electronically at checkout. The need for this has been further emphasized by the Wayfair decision (South Dakota v. Wayfair, Inc.), a landmark 2018 Supreme Court ruling.

Wayfair Decision Explanation
The Wayfair decision overturned the previous physical presence rule, which required businesses to have a physical presence in a state to be obligated to collect sales tax. Under the new ruling, states can require out-of-state sellers to collect sales tax if they exceed a certain threshold of sales or transactions within that state. This decision has greatly impacted online retailers, increasing their tax compliance obligations, including the need for permits in states like California, Kentucky, or Pennsylvania, where their inventory is stored.