Posted by Big Brand Wholesale.com on 3rd Feb 2020
There is a lot of misunderstanding regarding the difference between an EIN, an LLC, Tax ID and Resale Certificate, so I am going to explain the difference and where to obtain each one. in non-confusing terms.
An EIN is obtained through the IRS. It is so the United States Government can endlessly tax your business. The EIN is free to obtain because you will forever pay business taxes (in addition to personal taxes and likely payroll taxes) forever. A Tax ID number is the same thing. . All tax identification numbers have nine digits, such as 98-7654321. An employer's EIN number is an identifying tax ID number; just consider them to be the same thing.
An LLC is obtained through your state government, for example, Michigan.gov (my home state). An LLC is basically the birth certificate for your new baby (business). There's a ton of reasons you SHOULD get an LLC, but we will save that for a different article.
A Resale Certificate (Resellers Permit, Resale Permit, etc) is for businesses who wish to avoid paying sales tax because THEY plan to collect sales tax from their buyers. They will then pay that sales tax to the government. You must obtain your Resale Cert through your states TREASURY department. Every state gas a different form number (just to make things more difficult and confusing). MOST states offer a form online, but you have to really dig to find it. As I have mentioned in other posts, the majority of .gov websites are absolutely terrible and very difficult to navigate but if you genuinely try (and try and try more) you will find what you're looking for. WHAT NOBODY TELLS YOU is that you are NOT LOOKING FOR A "RESALE CERTIFICATE", instead what you are seeking is a "Use Tax Exemption" or "Tax Certificate of Exemption". In the state of Michigan this is called a "Form 3372" because obviously the state wants to make it as absolutely confusing as humanly possible.
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