If you’re opening a store and want to buy products at lower prices, you need a wholesale license to access supplier discounts.
Without it, you’ll pay the same prices as regular shoppers, which can make it harder to sell your products for profit. With the right permit, you can often buy wholesale items without paying taxes.
Read on to learn what a wholesale business license is, why you need one, how to get one, and how much it costs.
What is a wholesale license?
A wholesale license is a term commonly used to describe a seller’s permit that allows businesses to purchase goods for resale without paying sales tax upfront. This registration grants access to bulk rates from distributors and reduces overhead. The sales tax is then collected from the end customer at the point of sale.
Read: Wholesale vs. Retail: What’s the Big Difference?
Steps to getting a wholesale license
- Register your business and choose a legal structure
- Apply for an employer identification number (EIN)
- Obtain a sales tax permit or sales tax ID
- Gather the required information and documents
- Submit the wholesale license application and pay the fee
- Wait for approval and receive your wholesale license
1. Register your business and choose a legal structure
The first step to getting a wholesale license is to register your business. This process is usually done through your Secretary of State, and it’s during this process that you’ll choose a legal structure for your business.
Typically, retailers choose from the following business structures:
- Sole proprietorship
- General partnership
- Limited partnership
- Limited liability partnership (LLP)
- S Corporation
- Benefit corporation
- Limited liability company (LLC)
- Nonprofit
Choosing the right entity type also shapes your long‑term wholesale strategy for retail, from tax treatment to supplier negotiations.
2. Apply for an employer identification number (EIN)
Once you’ve registered your business, you can apply for an EIN. This is your business’s federal taxpayer ID, so it’s what you’ll use to open business bank accounts and file your taxes, for example.
To apply for an EIN for your business, you can go to the IRS website and follow the instructions. You’ll need your name, Social Security number, address, and business name to complete the application for an EIN. Typically, you can get your EIN on the spot.
3. Obtain a sales tax permit or sales tax ID
With your business registered and recognized by the IRS, you can apply for a sales tax permit and ID. A sales tax permit, also known as a sales tax license or seller’s permit, is a state-issued document that authorizes a business to collect sales tax from customers on taxable goods and services.
The specific requirements and regulations for obtaining a sales tax permit vary depending on the state, so it’s best to check the details with your local jurisdiction.
4. Gather the required information and documents
You’re all set to start operating your business, so now it’s time to get your information and documents ready to take the next step of getting your wholesale license.
While specifics may vary depending on where your business is located, a general checklist of required information and documentation includes the following:
- Full name
- Business name
- Taxpayer ID
- Business EIN
- Home address
- Business address
- Business contact information (email, phone, etc.)
- Business license
- Sales tax permit
- Business structure
- Nature of the business
You might not necessarily need a business license, but it could be required by your state. Even if it’s not required, getting a business license can support your case for why your wholesale license should be approved.
5. Submit the wholesale license application and pay the fee
Every state has its own process for obtaining a wholesale license. So, you’ll want to check with your local jurisdiction to find out what the application requirements are and whether there are any associated fees.
For example, California requires wholesalers and retailers to obtain a seller’s permit. While the permit process is handled online, the state may require a security deposit, depending on the business. In Florida, businesses that register to collect sales tax are issued a Florida Annual Resale Certificate, which allows them to buy items tax-free when purchased for resale.
A wholesale license is usually required for businesses that intend to sell products to other businesses (B2B) or to consumers (B2C). It’s common across industries like electronics, clothing, automotive parts, and food.
6. Wait for approval and receive your wholesale license
Once you submit your application, you wait for approval. Approval times vary by state and application method, and some applications may take longer than others.
Sometimes the agency needs to verify business details or request extra documentation. In other cases, they may conduct a physical inspection of your retail space (more typically for regulated industries or location-based permits). Be prepared for the possibility of follow-ups and respond quickly to requests.
To set expectations, some states publish timing guidance or minimum lead times. For example, the Texas Comptroller notes that new sales tax permit applicants can expect to receive their permit within two to three weeks. Nevada, on the other hand, is more vague, stating that applicants should “allow several weeks” for the permit ID. To know your approval timeline, check with your state agency’s official website for wholesale licenses.
Requirements to get approved for a wholesale license
While the requirements for wholesale licenses vary (and again, it’s best to check with your local jurisdiction) some general guidelines do apply. Typically, businesses are required to have the following to receive approval for a wholesale license:
A valid business registration and legal structure
Your business should be registered in the state where you operate and be properly structured.
An employer identification number (EIN) or federal tax ID
Your EIN is your business’s federal taxpayer identification number and serves to identify your business as a unique, standalone entity. To get a wholesale license, you’ll first have to complete this step if you haven’t already done so.
A sales tax permit or sales tax ID
While wholesale purchases may be tax-exempt, retailers are often required to pay sales tax for each sale they make. Some states don’t require sales tax, so it’s always best to check where you operate and where your customers are located.
A physical business address (not a PO box)
As a retail business, you likely have a physical address. Many states won’t accept a PO box address as your official business address when reviewing wholesale license applications. Be sure to always provide your physical address.
Proof of business insurance
Business insurance protects you against unforeseen and uncontrollable circumstances. Many states want businesses to have this layer of protection before approving wholesale licenses.
A completed wholesale license application
To receive approval for a wholesale license, you’ll need to successfully complete the required wholesale license application for the states where you plan to do business. This may require multiple applications and fees, depending on the nature of your business.
Payment of the wholesale license fee
While some states don’t charge a wholesale license fee, most will require some sort of payment or deposit. Again, you may have to pay multiple fees if applying in multiple states.
How much does a wholesale license cost?
The cost of a wholesale license varies depending on location and industry. In many states, businesses that need to buy inventory for resale typically need a sales tax permit or resale registration, which may have little or no direct cost.
In regulated industries, however, licensing fees can be much higher. A wholesale automotive auction license in Alabama, for example, costs $125. In New Jersey, wholesale alcohol licenses range from $1,031 to $8,750, depending on the license class.
Check prices with your local government. To set realistic profit margins, compare your potential license fees with broader pricing for wholesale guidelines.
Do I need a wholesale license?
If you want to resell products, you’ll likely need a wholesale license. Some businesses might need different kinds of resale permits depending on where they operate, and terminology around these permits varies by state.
Seller’s permit vs. wholesale license
In most states, a seller’s permit is the commonly used term for a state tax registration that allows a business to make taxable sales and collect and remit sales tax. But not every state uses that term. The term “wholesale license” is often used to describe that same permit when it’s used to purchase inventory for resale.
Resale certificate vs. wholesale license
A resale certificate is the document you provide to suppliers to purchase inventory without paying sales tax upfront. The tax is then collected from the final customer at the point of sale, if the item is taxable. A wholesale license refers to having a seller’s permit and using a resale certificate to buy goods tax-free.
| Seller’s permit | Wholesale license | Resale certificate | |
|---|---|---|---|
| Purpose | Official state registration to collect sales tax | Common term for registering to buy inventory for resale | Document used to purchase inventory tax-free for resale |
| Who needs it | Businesses selling taxable goods, subject to state rules | Businesses buying goods to resell | Registered businesses purchasing for resale |
| Tax impact | Allows you to collect and remit sales tax | Enables tax-exempt purchasing for resale (via resale certificate) | Defers sales tax to the final customer at point of sale |
Get a wholesale license for your retail business
Now that you know the benefits of having a wholesale license, you can get organized and gather the information you need to take advantage of having one. With the paperwork done, explore new wholesale opportunities to scale your store through bulk selling before you launch those products on Shopify.
Obtain a wholesale license FAQ
What can you buy with a wholesale license?
A wholesale license lets you buy large amounts of goods directly from makers or suppliers at lower, tax-free prices for reselling. You can buy finished products like clothes, electronics, and home items, or raw materials and packaging.
Can you buy wholesale with an LLC?
Yes. Creating an LLC makes your business legal, but suppliers still need to see your state’s official documentation (seller’s permit and resale certificate) to give you wholesale prices. You need both your LLC paperwork and the license.
Can I use my EIN to buy wholesale?
Suppliers might ask for your EIN (tax ID number) to check that your business is real, but just having an EIN doesn't let you buy tax-free. You must show a proper wholesale or resale certificate from your state.
What are the benefits of a wholesale license?
A wholesale license allows you to purchase inventory for resale without paying sales tax upfront, which can reduce inventory costs. It also lets you collect and remit sales tax, helping your business stay compliant with state tax laws. Many suppliers require proof of a valid wholesale license before they open an account for you.
How long is a wholesale license good for?
In most states, a wholesale license does not have an expiration date. It stays active as long as your business continues operating, files state tax returns, and stays in good standing. Some states require periodic renewals or updates, so check with your state’s tax authority for specific rules.
What are the consequences of operating without a valid wholesale license for my retail/ecommerce business?
Without a license, you’ll have to pay sales tax when buying inventory, which increases your upfront costs. If you’re selling taxable products without a license, your state can make you pay back taxes plus interest and fines. Operating without a proper wholesale license can also compromise your relationships with suppliers.
