Wholesale Dollar Store Buying: Tax-Free Resale Opportunities

Resale companies can buy tax-free items at wholesale.

Dollar store products are relatively inexpensive when you make purchases from online or in-store retailers. When buying these items at wholesale, additional discounts are available for bulk purchases. However, wholesale companies are allowed to sell tax-free products only to retailers, which resell the products to consumers. They also have policies that determine whether buyers who intend to use the items for personal use can make wholesale dollar store purchases.

Sales Taxes

Most states require companies that sell consumer goods, like dollar store items, to charge sales tax on purchases. They must obtain a sales and use tax permit, which allows them to collect sales tax from customers and submit the amounts to the state taxing authority. If you intend to purchase dollar store products for personal use, the seller must charge sales tax, even if you are buying in bulk. The tax rate also varies from state to state and often city to city; you can find out the sales tax rate for your area from your state department responsible for revenue or taxation. Most state taxing authorities provide online tools for you look up the current tax rate.

Tax-Exempt Status

Wholesale companies may qualify for a sales and use tax exemption in their state, if they sell their products only to resale companies. A wholesaler's eligibility for a sales tax exemption depends on the type of products and how these products will be used to carry out their businesses.

Buying At Wholesale for Retailers

If you are buying from a wholesale company, you must furnish your resale license number, which is printed on your sales tax permit. The wholesale company will request this information before you are able to complete a purchase, so that you can buy selected bulk items without paying taxes. Some companies may allow you to provide your federal tax identification number instead of the state resale license number.

Buying At Wholesale for Personal Use

If the wholesale company has a sales and use tax permit and accepts orders from consumers who intend to use their products for personal use, you can buy dollar store items at wholesale. However, you must pay taxes at the time of purchase. Some wholesale dollar store companies sell products to consumers as well as retailers. You will need to review the general policies or contact the company to find out.