In this world, nothing can be certain; except death, and taxes.
If you’re an e-commerce business, you should understand the importance of e-commerce tax exemption more than the average Joe.
Sellers who are not tax-exempt must pay sales taxes, at a time when tax-exempt sellers purchase without paying any.
For sellers who are sourcing their items from retailer stores for the purpose of resale on different marketplaces, becoming tax-exempt can increase your profit significantly.
Per state law, you can get a tax exemption if you present a resale certificate. The retail stores are obligated to abide by the tax exemption resale certificate when it is presented to them.
Walmart is considered to be one of the world’s largest retail stores since 1991, with nearly 11,503 stores all over the world.
Most of the sellers who are doing retailer arbitrage are mainly sourcing their products from Walmart.
How to Apply for Tax Exemption?
Before starting, you should have the following at hand:
- A resale certificate, which should be periodically updated, is required by the state where you are operating
- An LLC, S-Corp, or C-Corp.
- A Federal Tax ID number
- Tax Licensing
- Functioning Marketplace, such as Amazon, eBay, etc.
Additionally, before becoming tax-exempt, you should have an official company that is collecting and remitting taxes.
If you are sourcing items for resale, you do not have to pay taxes.
Sales tax is considered “pass-through,” meaning organizations collect from the customers and pass it to the states.
If you are selling products to end customers, you are required to collect the taxes and pass them to the states from where you are running your business.
Once you implement all the above-mentioned steps, you can set up the process of tax-exempt status.
So How to Get Walmart Tax Exempt?
You may probably know that each state has its own requirements concerning Tax Exemption.
Some of them require additional information; for example, CA, CT, FL, HI, MA, MD, MS, TN, DC, require you to register for resale with that state.
Before starting this process, you should contact their Department of Revenue office and create the registration. Provide them with a copy of their sales tax license.
However, AK, DE, MT, NH do not charge state sales tax, and there is no need to apply for an exemption.
Here is an Instruction on How to Add Drop-Ship States to Your Account:
- Go to your application and click EDIT, then move to the state section. For the selected states, enter NO NEXUS and put an expiration date.
- Then you have to put sales tax license information.
- Send the required forms a license to [email protected]. After receiving the approval email, you will not be charged sales tax.
As you can see, the process of getting Tax Exempt at Walmart is simple enough; all you need is just to provide all the required documentation.
However, keep in mind that we have merely provided you with an overview of getting tax-exempt since before setting up this process, you have to contact a legal and tax professional service like Prestige Auditors.
Feel free to contact us and we will gladly give you professional guidance on what you should do within your business.