Question: Would it ever be necessary for a high school who wishes to open a student store to obtain a resale license?

Response: The student store is usually operated as a fund-raising event for the entire student body. For this reason, the student council usually sponsors and operates the store, though a group of clubs may also operate the student store. Guidelines and procedures will need to be developed regarding how revenues from the store are allocated, budgeted and spent. These decisions should be documented in meeting minutes and in the ASB’s internal procedures at each school where stores are operated.

Sometimes people incorrectly refer to a seller’s permit as a resale number or resale permit. A seller’s permit is a state license that allows you to sell items at the wholesale or retail level and to issue resale certificates to suppliers. Issuing a resale certificate allows you to buy items you will sell in your business operations without paying amounts for tax to your suppliers. Generally, if you make three or more sales in a 12-month period you are required to hold a seller’s permit.

The requirement to obtain a seller’s permit applies to:

• Corporations

• Individuals

• Limited Liability Companies (LLCs)

• Limited Liability Partnerships (LLPs)

• Limited Partnerships (LPs)

• Partnerships

• Married Co-ownerships

• Registered Domestic Partnerships

• Organizations

Making sales of merchandise, goods or other items in California without first getting a seller’s permit violates the law and subjects you to fines and penalties.

When you hold a seller’s permit, you must file sales and use tax returns and pay any sales or use tax due on your sales and purchases. You must report and pay sales tax on each taxable sale. At the time you make the sale, you may collect from your customer an amount equal to the tax you will owe. As a registered seller, you will need to take the time to learn how to properly apply the sales and use tax law in your business operations. You also must keep adequate records that document your sales and purchases.

For more information regarding seller’s permits, please see Publication 73 -- Your California Seller’s Permit. BOE regulations and publications are available at www.boe.ca.gov or by contacting the Taxpayer Information Section at 800-400-7115. For a complete list of other BOE-administered taxes and fees, please see Publication 51 -- Guide to Board of Equalization Services.

3/2/10