Seller permit to sell online in US for non resident


2

I am a non resident of US. I'm setting up this online store where you can buy consumer products - targeted at US market. When I approached wholesale suppliers who don't have any affliate model they asked for EIN/ seller license.

  1. Is there a workaround to sell online without a seller permit like say use some identity of your company (a Delaware LLC) or your home country Tax ID.
  2. If you do need a seller permit, how can a non-resident (no SSN, ITIN) obtain it?
  3. Do you need separate state tax id or permit/license for every/any state.

Thanks in advance.

Ecommerce LLC License Incorporation

asked Oct 10 '09 at 13:12
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Jyothirmayee
11 points

4 Answers


2

An EIN is an Employer Identification Number issued by the Internal Revenue Service (IRS). It is also called a Tax ID. See http://www.irs.gov/businesses/small/article/0,,id=98350,00.html It is not a "Seller License" and I am not aware of a license required to sell. Some items are restricted from export and if one is importing/exporting there are documents required for such activity.

Each state has their own laws regarding business entities/structures. Separate from a business structure is a business license. Typically, you will establish the structure first (Corporation, LLC, Sole Proprietorship) then get the required licenses (state, county, local) - if any.

You will also need to get information about state sales tax, if any.

answered Oct 14 '09 at 07:36
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Val Lynn
483 points

1

Your Delaware LLC needs to apply for a TIN. It's free and can be done online in seconds. That's it. That's all the IRS and your partners need to report the flow of money to the US government to make sure that everyone pays the taxes they owe.

answered Nov 11 '09 at 11:29
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Alain Raynaud
10,927 points

1

To clarify the terminology and some background that a non-US person would not normally know:

TIN = Tax ID number

EIN = Employer ID number

SSN = Social Security Number

ITIN = Individual TIN

  • TIN=EIN. People use them interchangeably, though they really should not. The term TIN refers to how you identify your company or yourself to the federal government.
If you have a corporation, the EIN is given to you by the US Federal Government's IRS (Internal Revenue Service, the Federal tax collector).

If you are not a corporation, you use your SSN as your identifier to the IRS.

  • The EIN is given to a corporate entity. It is the equivalent of a social security number for corporations.
  • the SSN is the closest thing we have in the US to a national identity card. It is used for all personal (non-corporate) identification purposes.
  • Using the SSN for tax identification causes a problem, since only people born in the US and legal immigrants have the number (in other words, people allowed to work in the US). If you are not allowed to work in the US, you do not have a TIN, and that causes problems as is your case, since you do not need to work in the US, but you do need to pay taxes due to your business activity (which is not illegal; it is not illegal for a foreigner to open a business here, it's illegal to work here only [The sense of this is a debate for a later time]).
  • The ITIN is given by the IRS to individuals who, though they are not allowed to work in the country, still have to report earnings/profits to the IRS. This number has the same format as the SSN, though it would be detected as an invalid SSN (SSN's can be decoded, that's also a topic for another day). Anyway, suffice it to say that without ITINs, people have to resort to much more shady things such as sharing someone else's SSN, and that really causes problems in the long term for everyone. Bottom line: You can get a ITIN from the IRS if you ask for it, no matter where you are from.

So much for tax ID numbers :)

About sales permits: Wholesalers ask you for this because we have a sales tax structure. It is not a VAT (Value added tax). What that means is that if you buy merchandise for resale, you do not pay tax on it. You, as the final seller, pay zero sales tax on your mechandise, and you collect the full sales tax from whom you sell to (that does not have a reseller ID). So you have to pay sales tax based on your sales. This is different from a VAT structure where you pay sales tax at purchase time regardless of whether or not you will resell the merchandise.

The wholesaler that sells to you will report that they sold the goods to you and did not charge you sales tax, because you are a reseller. They need to report your reseller permit number to justify to the authorities why they did not charge you sales tax. This is why the number is necessary. In most states (if not all) you do not need to be a corporation (ie, have an EIN) to have a reseller ID number. You can be a sole proprietor (not have a corporate entity) and be a reseller at the same time.

Now, to make this even more complicated: There is no national sales tax here. The sales tax structure is set by your state. This means that you have a bunch of different sales tax rates and rules for collecting sales tax, depending on which state your company has a physical presence on. Almost. Some states have begun charging sales tax for any sales made to that state (regardless of where the seller is located). Or charging sales tax for sales of goods shipped out of state (which did not have to pay tax until recently.

It becomes a big mess.

Fortunately, this is stuff that many accountants (if not all) know. Instead of us making a bad effort to clarify things here, it would be a very good idea for you to get a hold of an accountant at your state and have the accountant tell you exactly what you need to know about sales taxes for your state. Even if we could give you an accurate picture of how to do it here, it would vary by state.

Anyone, please feel free to correct anything that I might have explained wrong here.

answered Nov 11 '09 at 13:09
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Gabriel Magana
3,103 points

1

I believe your real issue is obtaining an EIN as a company that does not have an officer here in the U.S. with a social security number to which the EIN can be tied.

Please see "Foreign Company Alert: Obtaining an EIN may be your Biggest Challenge in the U.S.", which addresses precisely this issue.

answered Dec 9 '09 at 06:38
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Dana Shultz
6,015 points

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