A reseller number, commonly referred to as a resale certificate or sales tax ID, is a license that enables companies to buy products without having to pay sales tax on them. Getting a reseller number is an essential step in the process of starting a business in Iowa. What you need to know about obtaining a reseller number in Iowa is provided below.
You must first choose the type of business structure you wish to set up. In Iowa, you have the option of forming either an LLC or a sole proprietorship. A sole proprietorship is a company owned and run by one person, but an LLC is a separate legal entity that offers personal liability protection for its members. A lawyer or accountant should be consulted to help you choose the right structure for your company’s needs.
Once your company’s organizational setup is complete, you can submit an application for a reseller number with the Iowa Department of Revenue. Through the Iowa Business Registration portal, you can register online, or you can fill out a paper application. Basic information about your company, such as your business name, address, and tax identification number, must be included on the application.
Depending on your business structure and the products you intend to sell, different reseller numbers in Iowa cost different amounts. For instance, you must pay a $20 charge for a sales tax permit if you intend to sell taxable items like apparel or gadgets. However, you won’t have to pay a fee if you simply want to sell non-taxable commodities like food or medicine.
You might also need to request an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) in addition to a reseller number. An EIN is a distinct nine-digit number that serves as your company’s tax identification number. You can submit an online application for an EIN through the IRS website for no charge.
In conclusion, acquiring an Iowa reseller number is a prerequisite for every company planning to sell products. You may make sure that your company is legally registered and in conformity with state tax rules by adhering to the recommendations given above. Keep in mind to seek advice from an accountant or attorney to determine which business form would serve your needs the best.