A seller’s permit is a permit that you get from the Department of Taxation to collect sales tax on items you sell.
To get a Virginia seller permit, you must be registered with DOR and have an assigned resale number (UBI #) or apply online through the eVA system. You can begin your application online by visiting the Virginia Department of Taxation
The Application Process
- Once your application is processed, you will receive your seller’s permit by fax or mail within 5-7 business days. You must display the full name and complete address on the seller’s permit certificate at each location where you conduct business. The permit is good for five years, and the cost of a seller’s permit is $50.
- You may be required to register with your local government body to collect their sales tax along with the state sales tax. Example- If you operate out of an office park, your landlord will likely require you to collect the local body’s taxes.
- Your resale certificate number must be included on all purchase orders, invoices, and receipts for items you sell. Sales tax will be calculated based on your assigned resale number or, if not included, the destination of the item being sold.
- If you plan to sell outside of Virginia, you must make sure to check with the Department of Taxation in your destination state for their requirements.
How To Find Your Resale Number
- Log in to your DOR account at https://www.tax.virginia.gov/Account/Login/Default/
- Click on My Account, then click View Unregistered Purchaser Status
- Enter your business information and click Continue
- Your resale number and sales tax rate will be listed within the Account Summary section on the left-hand side of your screen
- If you need assistance, please refer to the Department of Taxation
How To Calculate Sales Tax
There are two main components to remember when calculating sales tax:
- The taxable amount of the transaction is the amount paid for your good(s), services, or other items payable to you. If you sell an item for $100, with no other charges or fees, the taxable amount would be $100.
- The tax rate is 6% in most counties. Some items may have a different sale tax rate depending on the locality.
Example- You sell two widgets that cost you $200 each for a total of $400. There are no other charges or fees associated with the sale.
Taxable Amount- For each widget, the taxable amount would be $200
Sales Tax Rate- 6% (.06)
The calculation for this transaction is as follows:
$400 x .06 = $24 in sales tax owed to DOR by you
What Are Some Examples of Items That Are Not Taxable?
Some items are not taxable and do not require you to charge sales tax on them. These items include:
- Food, candy, bakery goods, and other consumables that are for sale or free samples were given away with a value of less than $4.99
- Clothing, handbags, luggage, umbrellas, furs, jewelry (unless it’s gold), watches are not taxable when they are sold for less than $300
- School supplies including pens, pencils, paper, and other similar items that cost $20 or less per dozen
- Personal hygiene products such as soap and shampoo
In conclusion, there are many things to keep in mind when applying for a seller’s permit with the Department of Taxation.