To get a sales tax permit, you apply online through the tax agency of each state where your business has a sales tax obligation, supply basic business and owner information, and receive your permit — usually free of charge — within a few days. The application itself takes about 15 to 30 minutes once your documents are together. Five states have no statewide sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon), so if all your sales occur in those states, you can skip the process. Every other state requires registration before you collect a single dollar of tax from a customer.
Do You Actually Need a Permit
The threshold question is not where your business sits, but where your customers are and how much you sell to them. Any business selling taxable goods or certain taxable services into a state with a sales tax generally needs a permit from that state.
Two kinds of connection, called nexus, can trigger the requirement. Physical nexus is the traditional one: an office, warehouse, inventory, employees, or a sales representative in the state. Economic nexus is newer. In 2018, the U.S. Supreme Court ruled in South Dakota v. Wayfair, Inc. that states can require out-of-state sellers to collect sales tax based solely on the volume of sales into the state, with no physical presence.1Supreme Court of the United States. South Dakota v. Wayfair Inc. Opinion 17-494 Every state with a sales tax has since adopted economic nexus rules.2MTC.gov. Wayfair, What’s Fair, and Undue Burden
The most common threshold is $100,000 in annual sales into the state. California and Texas set the bar at $500,000; Mississippi and Alabama at $250,000. Some states also count 200 transactions as a separate trigger, though several eliminated their transaction thresholds between 2024 and 2026, leaving only the revenue number.
One important exception: if you sell exclusively through a marketplace like Amazon, Etsy, or Walmart Marketplace, you may not need your own permit at all. Every state with a sales tax now has a marketplace facilitator law that puts the collection duty on the platform. Sell on your own website, at craft fairs, or in a physical store in addition to the marketplace, though, and you need your own permit for those direct sales. The platform’s collection covers only what moves through the platform.
What to Have Ready Before You Apply
Most state portals do not let you save your progress, so pull everything together first.
- Employer Identification Number (EIN). A nine-digit federal identifier, free from the IRS website and issued immediately upon approval of the online application. Sole proprietors with no employees can sometimes use a Social Security number instead, but an EIN keeps your SSN off business paperwork. Federal regulations require entities other than individuals — corporations, partnerships, LLCs — to use an EIN as their taxpayer ID.3Internal Revenue Service. Get an Employer Identification Number4eCFR. 26 CFR 301.6109-1 Identifying Numbers5Office of the Law Revision Counsel. 26 USC 6109 Identifying Numbers
- Legal business name as registered with your Secretary of State, plus any DBA names.
- Business structure: sole proprietorship, LLC, partnership, corporation, or other.
- NAICS code. A six-digit code from the North American Industry Classification System describing what your business does. Look yours up at the Census Bureau’s NAICS search tool.
- Business addresses. Physical location where sales occur, mailing address, and any additional locations. The physical address determines local tax rates.
- Owner and officer information. Names, home addresses, and full or partial Social Security numbers for all owners, partners, officers, or managing members.
- Estimated sales figures. States use these to assign your filing frequency.
How to Submit the Application
Nearly every state accepts online applications through its tax agency’s website. You create an account, enter your information, and submit. Some states issue your permit number immediately; others take a few business days. A confirmation number typically arrives right away, with the formal permit following by mail or as a downloadable PDF.
Paper applications still exist in most states but take significantly longer. If you go that route, send it by certified mail with a return receipt.
Fees and Security Deposits
Most states charge nothing for the permit itself. A few charge a nominal registration fee, typically under $100. The larger cost, when it applies, is a security bond. States can require new applicants — particularly those with poor credit history, past tax delinquencies, or no established track record — to post a bond ranging from a few hundred dollars to well over $10,000, depending on estimated tax liability. Most new businesses will not face this, but it is worth knowing about before you apply.
Registering in Multiple States at Once
If you need permits in many states, the Streamlined Sales Tax Registration System lets you register in all participating member states through a single online application.6Streamlined Sales Tax. Sales Tax Registration SSTRS Not every state participates. California, Texas, and New York are not members, so you will still need to register separately in those.
After You Receive Your Permit
Once approved, you are legally authorized and required to collect sales tax on taxable transactions. Most states require you to display the permit at your primary place of business. For online-only sellers, the display requirement is effectively moot, but keep the permit accessible in case of audit.
Resale Certificates
A permit lets you issue resale certificates to your suppliers. When buying inventory you intend to resell, give your supplier a resale certificate instead of paying sales tax on the purchase. The certificate lists your business name, address, permit number, and a description of what you sell, and you sign attesting the items are for resale rather than personal use.
Certificates come in two forms: single-use for a one-time purchase, and blanket, which covers all future qualifying purchases from the same supplier. Using resale certificates for personal purchases is treated as fraud and is a common audit trigger.
Use Tax on Your Own Purchases
Permit holders also owe use tax on business purchases where no sales tax was charged. Office furniture bought from an out-of-state vendor who did not collect your state’s tax generates a use tax liability, reported on the same return as your sales tax.
Filing Returns
Getting the permit is the beginning; filing returns and remitting collected tax is the ongoing obligation. States assign a filing frequency based on volume:
- Monthly for higher-volume businesses. Some states trigger monthly filing at $10,000 or more in monthly taxable sales; others look at quarterly liability.
- Quarterly for most small to mid-sized businesses.
- Annually for very low-volume sellers, typically when total annual tax due is under a few thousand dollars.
Frequency can change as your sales change. Returns are commonly due on the 20th of the month following the reporting period, though dates vary by state. File for every period, even when you made zero sales. Missing a zero-dollar return is one of the most common compliance mistakes and triggers penalties on its own.
Keeping the Permit Current
A sales tax permit generally stays valid as long as you are operating. Most states do not require periodic renewal, but you must notify the state when key details change: business address, legal name or DBA, ownership or structure, and adding or closing locations. Most updates can be made through the same online account you use for filing.
Permits are not transferable. If you sell your business, the new owner applies for their own, and the old one is closed. If you stop operating, close the permit and file a final return. Leaving a permit open when you are no longer selling generates filing obligations and penalty notices long after you have moved on.
Penalties for Skipping Registration
Operating without a required permit is treated seriously. States can impose civil fines for each violation, and each sale can count as a separate one. Collecting sales tax from customers without a permit and keeping the money is treated as fraud or theft in many jurisdictions and can carry criminal charges.
Late-filing penalties on returns typically run 5% to 10% of the tax due per month, capped at 25% to 50% of the total. Many states impose a minimum flat penalty of $50 or more even on late zero-dollar returns. Late payment penalties and interest accrue separately, so missed deadlines compound quickly. Filing on time, even without full payment, avoids the filing penalty while the payment penalty stops accumulating once you catch up.