I am a simple ebay/ e-business retailer selling goods purchased at wholesale. I have been trying to seek various distributors and wholesalers. Often times I am asked for a TAX ID number, is it necessary for me to obtain and apply for a TAX ID number when I do have any employees? What are the implications of obtaining a TAX ID number? Is there some sort of loophole for me to skip this step?

Distributors and suppliers want your "sales tax ID number" so they do not have to charge you sales tax on your purchases because sales tax is paid only by the ultimate consumer of the product. If you are purchasing the goods to sell then you are not the ultimate consumer so you should not have to pay the sales tax on your purchase. If you don't provide a sales tax ID number the supplier has to collect sales tax from you because if he doesn't the supplier will have to pay it upon state audit. You get a sales tax ID number from your state by registering your business and applying for the number.

In most cases the state sales tax ID number is not your federal or state employer ID number, your incorporation number, charter number, social security number, or your federal income tax ID number.

Many suppliers want you to have a sales tax ID from your state to prove that you are a legitmate business, and not just a consumer / part-timer. It proves to them that you have a real business.

And, for your own protection, you should be charging sales taxes on any sales delivered within your own state, unless you live in one of the few with no sales tax. If you are selling and not collecting the sales taxes, YOU are responsible for them, whether you collect or not. Plus, you will be subject to penalties and interest.

It is in you best interest to get a sales tax number ASAP.

Here is a link to more on the subject -

If you're a business..then yes you want a sales tax number (sometimes referred to as your seller's permit). The consequences of not having one are not worth it. In addition, you'd want to get your EIN to establish your corporation's own identity (i.e. it's on SSN per se). Why use your SSN if you own a corporation? The simple answer...you don't