How does a Canadian Inc. get a reseller # to give to USA suppliers to purchase and sell in the USA.

[singalong]

Have a Canadian company.  Wish to purchase from US suppliers.  They are asking for a reseller number.  

 

How would I get a reseller number as a Canadian company to give to a US supplier.  

 

The products purchased from the US supplier never leave the US.  These products will be purchased and sold in the USA.

 

Any Canadians that have done this or know how to do it and wish to share would be much appreciated.

[MrPhil]

That's an interesting question, which I can't completely answer. In any state that charges sales tax (most do), a purchaser needs certification that they are a reseller (wholesaler), not the end buyer, to be exempt themselves from paying sales tax. Only the end buyer needs to pay sales tax. If selling across state lines, sellers usually aren't required to collect sales tax (unless they have a "nexus" in the buyer's state), but the buyer is responsible for reporting their purchase and paying "use tax" equivalent to what they would pay in sales tax if purchased locally.

 

This is complicated, as you are a Canadian doing the selling, but your drop-shippers are sending both in-state and out-of-state. If you were shipping from Canada to a US state, any customs duties and fees would have to be paid, as well as "use tax", by the buyer. If you were in a state and selling in-state, whether by drop-ship or other means, you would have to collect and remit sales tax. Selling out-of-state, it's up to the buyer to report and pay "use tax".

 

Your drop-shippers are trying to protect themselves from being prosecuted for failure to collect sales tax. I can't tell you what the rules are for a US-based seller (using drop-shippers), but my assumption is that someone needs to collect sales tax for sales within the same state as a given drop-shipper. I would assume that the seller has to collect sales tax as part of the payment in such cases, but you need to check with someone who knows for sure. It might even be that a seller only has to collect sales tax on sales within their state, regardless of where the drop-shipper is, but don't quote me on that. As you're not within any state, you might have to check with each state of your drop-shippers to see what they require.

 

Be careful about taking advice from out-of-US sellers using US-based drop-shippers, as they may be doing it all wrong (illegally)! I would get more formal advice too. Do you have a US Chamber of Commerce (in Canada) you can contact?

[Dan Cole]

Most suppliers will accept your GST/HST registration.  They just want proof that they are in fact dealing with a reseller and not the end consumer and the GST/HST registration is usually sufficient for that purpose.

 

Dan