To get a sales and use tax certificate, register your business through your state’s department of revenue, usually through its online portal, after confirming your business has nexus in that state. Most applications take 30 to 60 minutes once you have your paperwork together, and more than 40 states charge nothing to issue one. The certificate (also called a seller’s permit, resale certificate, or vendor license depending on the state) gives you the legal authority to collect sales tax from customers and to buy inventory tax-free for resale. Forty-five states and the District of Columbia impose a sales tax. Five states do not: Alaska, Delaware, Montana, New Hampshire, and Oregon.
Confirm You Actually Need to Register
Before applying anywhere, figure out which states can require you to collect their tax. The legal test is called nexus, meaning a connection between your business and a state strong enough to pull you into its tax system. There are two kinds, and triggering either one is enough.
Physical Presence
A retail location, office, warehouse, or even a single employee working from home in a state creates physical presence nexus there. If you run a storefront, you plainly have nexus in that state and need to register there before you open.
Economic Nexus
In 2018, the U.S. Supreme Court held in South Dakota v. Wayfair that states can require sales tax collection based on sales volume alone, with no physical presence required.1Supreme Court of the United States. South Dakota v. Wayfair, Inc. Virtually every sales-tax state has since adopted an economic nexus law.
The most common threshold is $100,000 in gross sales into a state during a calendar year. Some states add an alternative trigger of 200 or more separate transactions, though that transaction count is being phased out in favor of the dollar figure alone.2Streamlined Sales Tax. Remote Seller State Guidance If you ship to customers in multiple states, check the threshold and effective date for each one. You only need to register in states where you have nexus, so this step tells you how many applications you’re actually filing.
Gather Your Information Before You Start
State applications ask for roughly the same core data regardless of jurisdiction. Pulling it together first makes the application itself fast and avoids rejections or holds.
- Your legal business structure (sole proprietorship, LLC, S-corp, C-corp), which determines how the state classifies your tax account.
- Your federal Employer Identification Number (EIN). Sole proprietors without employees can sometimes substitute a Social Security Number, but an EIN is cleaner.
- Your primary business address, any additional locations, and a mailing address if it differs.
- Owner and officer information: names, home addresses, and Social Security Numbers for all principal owners, partners, or officers. States use this to establish who is personally responsible if sales tax goes unremitted.
- An estimated sales volume (monthly or quarterly), split between taxable and nontaxable revenue. The state uses this estimate to assign your filing frequency.
- Bank routing and account numbers. Nearly every state requires electronic funds transfer for tax payments.
Apply Through the State’s Revenue Department
Registration goes through each state’s department of revenue, department of taxation, or similarly named agency. Every sales-tax state offers an online portal, and that route is far faster than paper. The online form itself usually takes 30 to 60 minutes if your paperwork is ready. Paper applications still exist in most states and add weeks of processing time.
Fees and Security Deposits
More than 40 states charge nothing for a basic sales tax permit. The ones that do charge keep it modest, generally $10 to $100. A larger potential cost is a security deposit. States may require one from new businesses, from applicants whose owners have a history of tax delinquency, or from businesses in industries with high noncompliance rates. The deposit is usually calculated as several months of your estimated sales tax liability and is held until you establish a record of timely filing, often two to three years.
When You Get Your Certificate
Many states issue a registration number or temporary certificate immediately on submission, letting you start collecting tax right away. A permanent certificate through an online portal can arrive the same day or take a few weeks, depending on the state and whether your application triggers additional review. If the certificate is mailed as a physical document, add standard postal time. Whenever the paper arrives, your legal obligation to collect tax begins the moment the state activates your registration.
Once you’re active, you charge the combined state and local rate based on the customer’s delivery address. Local rates vary significantly even inside a single state, so a tax-rate lookup tool is worth setting up on day one rather than guessing.
If You Sell Through Marketplaces
Sellers who operate exclusively through platforms like Amazon, Etsy, or eBay may not need to register in every state where orders ship. Nearly every sales-tax state has adopted marketplace facilitator laws that shift collection and remittance to the platform itself.3Streamlined Sales Tax. Marketplace Facilitator State Guidance The platform collects the tax and sends it to the state on your behalf.
That relief only covers sales made through the platform. Sales through your own website, at craft fairs, or through any other channel still count toward economic nexus thresholds. Once your total sales into a state cross the threshold (and many states count marketplace sales toward it), you need to register and start collecting tax on your non-marketplace sales yourself. Marketplace sales then get reported as nontaxable on your return because the platform already handled the tax.
Registering in Several States at Once
If you need to register across many states, filing separate applications with each one is a slog. The Streamlined Sales Tax Registration System (SSTRS) is a free, centralized online tool that lets you register in more than 20 participating member states through a single application.4Streamlined Sales Tax. Sales Tax Registration SSTRS Member states include Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.5Streamlined Sales Tax. Streamlined Sales Tax
States outside the Streamlined system (California, Texas, New York, Florida, and Illinois among them) require you to register directly through each state’s own portal. Third-party tax compliance services will handle multi-state registration for a fee, but the direct route through each state is always free.
What the Certificate Obligates You to Do
A sales tax certificate is not a one-time filing. It turns you into an ongoing tax collector for the state, with recurring deadlines and real penalties for missing them.
Filing Frequency
The state assigns your filing frequency based on the sales volume you reported on your application. Higher-volume sellers file monthly, moderate-volume sellers quarterly, and very small sellers annually. The most common deadline is the 20th of the month following the end of the reporting period, though states vary. Your registration confirmation will spell out your specific schedule.
File a return every period, even when you collected no tax. Skipping a zero-dollar return is one of the most common mistakes new filers make, and it triggers late-filing penalties the same as unpaid tax.
Vendor Discounts
About 27 states offer a small vendor discount (sometimes called a collection allowance) that lets you keep a percentage of the tax you collected as compensation for the administrative work. These discounts typically range from 0.5% to 3% of the tax collected, with most states capping the dollar amount per return period.6Federation of Tax Administrators. State Sales Tax Rates and Vendor Discounts You generally need to file and pay on time to qualify.
Use Tax on Your Own Purchases
The “use” half of a sales and use tax certificate covers your purchases, not your sales. When you buy something taxable for business use from a vendor who doesn’t charge your state’s sales tax, typically an out-of-state seller, you owe use tax at the rate your state would have charged. Ordering office equipment from an online retailer that doesn’t collect your state’s tax is the classic example. Use tax gets reported on the same return as sales tax. Auditors routinely compare out-of-state purchase records against reported use tax, so this is not a theoretical obligation.
Personal Liability for Collected Tax
States treat the sales tax you collect from customers as money you hold in trust for the government, not as business revenue. If you collect it and fail to remit it, most states can pursue the individual officers, owners, or managers who had authority over tax compliance. Corporate structure does not shield you. Mixing collected sales tax with operating cash and spending it is the fastest way to create personal exposure.
Using the Certificate to Buy Inventory Tax-Free
The second function of your certificate is buying goods for resale without paying sales tax on them. Without this exemption, tax would stack at every level of the supply chain and the end customer would pay tax on tax.
When you buy goods for resale, you give your supplier a resale certificate that includes your sales tax registration number. The supplier treats the sale as exempt because tax will be collected from your end customer. Many states accept the Multistate Tax Commission’s Uniform Sales and Use Tax Resale Certificate, which works across participating states through a single form.7Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate Other states require their own form.
The exemption only covers items you’ll resell or that become a physical component of a product you sell. It does not cover items your business consumes internally. Office furniture, cleaning supplies, staff computers, and store fixtures are all taxable purchases even though they support your sales operation. Using a resale certificate on those items is a common audit flag and leads to penalties.
You’ll also receive exemption certificates from your own customers: nonprofits, government agencies, and other businesses buying for resale. You must accept valid certificates and keep copies on file for the retention period your state requires, typically at least three to four years and longer in some states. If an auditor questions a tax-free sale and you can’t produce the exemption certificate, you owe the tax plus penalties regardless of whether the customer’s exemption was legitimate. The burden of proof sits with the seller.