How to Apply for a Retail License
A retail license authorizes you to sell tangible personal property in the state where you run your business. Tangible personal property is anything physical other than real estate, such as computers, furniture, tools and trucks. You may also need a business permit from your city or county government.
Tip
You take out a retail license with your state government. Start with the department of taxation or department of revenue website. In addition to the application instructions, the website should list any retail businesses that are exempt from the tax. If that includes you, you're off the hook.
Most tangible personal property sales are subject to sales tax. When you take out a retail license, you're registering with the state as a sales-tax-paying business. Depending on your state, it may be known as a seller's permit or a certificate of registration.
As a general rule, anyone who sells tangible personal property is a retailer as far as retail license laws are concerned. Whether you open a brick-and-mortar store, sell your homemade jewelry at flea markets or make your sales online, you need to get your retail license before you start selling. Some states also require a retail license from companies that sell services.
You need a license for every state where you have a physical presence, such as a store or a kiosk. If you do all your selling over the internet, you may still need a retail license for states to which you ship. South Carolina, for example, requires a license if you sell more than $100,000 in goods or services there, even if it's all mail order.
If you sell at multiple locations, you may need a retail license for each store.
When you research your state's retail license rules, don't forget to read any information on exemptions. In California, for instance, if you don't make at least three sales in 12 months, you don't need a seller's permit. Likewise, if you sell at flea markets just once a quarter in South Carolina, you may not need a retail license.
States also offer special licensing for special cases, such as selling at trade fairs or selling at a temporary location for a month or so.
Your state should have an online portal you can use to apply for your license. It may also give you the option to print out and download your application and then mail it in. Typical information you'll have to provide includes:
- Name of the business.
- Mailing address and physical location.
- Your Social Security number and your federal employer ID number.
- The business structure: sole proprietorship, partnership, corporation, etc.
- Names of the owners.
- What kind of goods you're selling.
You'll have to pay the state fee along with the license. If you have any back tax debt you owe the state, the department of revenue will probably require you to pay that before issuing your license.
Getting your retail license from the state may not be the end of the paperwork. There are other types of licenses you may need before you open your doors.
For instance, most cities and counties across the country require businesses in their jurisdiction to take out a business license. This is simply a permit authorizing you to operate within city or county limits. In Atlanta, for example, your business license application includes:
- A new-business tax application.
- A copy of a government-issued photo ID.
- $125 in license and zoning-review fees. The city zoning department will review whether you can even open your business at the location you've chosen.
- Copies of any regulatory licenses your business needs.