To get a sales tax permit, apply through your state’s department of revenue website: create an account, submit your business details, and receive a permit number, usually within a day or two and at no cost in most states. The permit authorizes your business to collect sales tax from customers and marks you as responsible for sending that money to the state on a schedule the state assigns. Five states have no statewide sales tax at all — Alaska, Delaware, Montana, New Hampshire, and Oregon — so a business operating exclusively in one of those doesn’t need one.
Confirm You Actually Need to Register
Registration is required in a state only if your business has a sufficient connection there. Tax law calls that connection “nexus,” and it takes two forms.
Physical nexus is the obvious one. A warehouse, office, storefront, or employee in a state creates it. So does storing inventory in a third-party fulfillment center located there.
Economic nexus is the newer standard. In 2018, the U.S. Supreme Court held in South Dakota v. Wayfair, Inc. that a state can require sales tax collection based on sales volume alone, with no physical presence.1Supreme Court of the United States. South Dakota v. Wayfair, Inc. Nearly every state with a sales tax has since adopted a threshold, and the most common is $100,000 in annual sales into the state. About 18 jurisdictions also trigger registration once you exceed 200 separate transactions, though several states have dropped the transaction count and now look at revenue only.
A few states set a higher bar. California, New York, and Texas each use $500,000, and Alabama and Mississippi use $250,000. If you sell into multiple states, check each one separately.
If You Sell Only Through a Marketplace
Selling exclusively through a platform like Amazon, Etsy, or Walmart Marketplace may mean you don’t need your own permit for those sales. Nearly every state with a sales tax has a marketplace facilitator law that requires the platform to collect and remit tax for third-party sellers. But this only covers sales made through that platform. If you also sell through your own website, at trade shows, or from a physical location, those transactions still need a permit. Some states also require marketplace sellers to register and file returns even when the platform collects every dollar. If you sell through any channel beyond a single marketplace, or expect to soon, get your own permit.
Gather Your Information Before You Start
Every state application asks for roughly the same core information. Having it ready avoids mid-application delays.
- Federal Employer Identification Number (EIN). LLCs, corporations, and partnerships need one. The IRS issues EINs for free through its online tool, with the number available immediately on approval. Sole proprietors without employees can use their Social Security number instead.2Internal Revenue Service. Get an Employer Identification Number3Internal Revenue Service. Taxpayer Identification Numbers (TIN)
- Legal business name. This must match your Secretary of State filing. If you operate publicly under a different name, keep your DBA registration handy too.
- Business structure. Sole proprietorship, single-member LLC, multi-member LLC, corporation, or partnership.
- NAICS code. A six-digit code identifying your business activity. Most state portals let you look it up during the application.
- Date operations began. If you’ve already been selling, the state needs to know when you started.
- Estimated monthly sales. States use this projection to set your initial filing frequency.
- Owner and officer details. Names, home addresses, Social Security numbers, and phone numbers for anyone with an ownership stake or management authority.
Some states also ask for bank account details so they can set up electronic tax payments from the start.
Submit the Application
Your state’s department of revenue (or equivalent tax agency) hosts the application on its website. Create an account, enter your business details, review the summary, and submit with an electronic signature. Most states charge nothing for the permit itself. A handful impose a small filing fee, and a few require a refundable security deposit or surety bond for new businesses.
Online applications typically produce a permit number within a day or two. Some states issue it instantly. Paper applications are still accepted in most jurisdictions but take several weeks to process. Apply online if you can.
Save your confirmation number when you submit. It’s your proof of timely application if any question comes up later.
Registering in Several States at Once
If your business has nexus in multiple states, filing separate applications gets tedious. The Streamlined Sales Tax Registration System lets you register in 24 member states through a single free application.4Streamlined Sales Tax Governing Board. Streamlined Sales Tax You fill out your information once and select which member states you need.5Streamlined Sales Tax Governing Board. Sales Tax Registration SSTRS For non-member states, you’ll still apply directly through each state’s own portal.
After the Permit Arrives
Getting the permit is the easy part. The ongoing work is collecting tax at the right rate, filing returns, and remitting what you’ve collected on time.
Filing Frequency
Your state assigns your filing schedule based on expected tax volume. Higher-volume businesses file monthly, moderate-volume sellers file quarterly, and small sellers may file annually. States reassess this periodically. As sales grow, expect your frequency to shift to a shorter cycle. Thresholds vary widely: some states move you to monthly filing once annual tax liability exceeds a few thousand dollars, while others set the bar much higher.
File Even When You Owe Nothing
If you collected no sales tax during a period, you still have to file a return showing zero. New business owners get tripped up here constantly. Skipping a period because there was nothing to report is treated as a delinquent filing, and most states charge a penalty for it. File every period, even when every line is zero.
Display and Records
Most states require you to display the permit at your place of business where customers can see it. Some states want online-only businesses to list the permit number on their website.
Keep detailed records of every taxable and exempt transaction. The IRS recommends retaining tax records for at least three years as a general baseline, and longer in certain circumstances.6Internal Revenue Service. How Long Should I Keep Records State requirements for sales tax records typically mirror or exceed that, with many setting a four-year minimum.
Renewals
In most states, a sales tax permit is permanent and doesn’t expire as long as your business stays active and compliant. A smaller number of states require renewal every one to three years. Letting a renewal lapse can leave you technically operating without authorization to collect tax, which puts you in the same position as a business that never registered.
Buying Inventory Tax-Free
One immediate benefit of holding a permit is the ability to buy inventory without paying sales tax on it. When you purchase goods to resell, you give your supplier a resale certificate instead of paying tax at the point of purchase. The customer pays tax when you sell the item, so taxing the same goods twice would be double-dipping.
The Multistate Tax Commission publishes a Uniform Sales and Use Tax Resale Certificate that dozens of states accept, so you don’t need a separate form for every state where you buy inventory.7Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate – Multijurisdiction A resale certificate is valid only for items you genuinely intend to resell. Using one to buy office furniture for your own use is tax fraud, and it’s a common audit trigger.
The Money You Collect Is Not Yours
Sales tax you collect from customers belongs to the state from the moment the customer pays it. You’re holding it in trust until the filing deadline.
If a business fails to remit collected sales tax, most states can pierce the corporate structure and hold individual owners, officers, and anyone with control over financial decisions personally liable for the full amount, plus interest and penalties. An LLC or corporation won’t shield you. The IRS applies the same principle to federal trust fund taxes like payroll withholding, where responsible persons face a penalty equal to the full unpaid amount.8Internal Revenue Service. Trust Fund Recovery Penalty States take a parallel approach for sales tax.
The practical rule: never use collected sales tax to cover other business expenses. If cash flow gets tight and you pay rent instead of remitting, that decision can follow you personally even after the business closes.
If You Should Have Registered Earlier
Many businesses discover their obligation only after they’ve already crossed an economic nexus threshold, sometimes years later. Quietly registering now and hoping nobody notices the gap is risky. States can assess back taxes, interest, and penalties for every period you should have been collecting.
A Voluntary Disclosure Agreement is usually the better path. The Multistate Tax Commission runs a program that lets businesses approach participating states to settle outstanding obligations on more favorable terms.9Multistate Tax Commission. Multistate Voluntary Disclosure Program Procedures In exchange for voluntarily coming forward, filing the required returns, and paying back taxes plus interest, the state typically waives penalties and limits how far back it looks. Many individual states run their own voluntary disclosure programs with similar terms.
A useful feature of these programs is that you can initially remain anonymous while exploring your options, only identifying your business once you’ve agreed to the terms. If you know you’re behind in one or more states, pursuing a voluntary disclosure before the state contacts you is almost always cheaper than waiting for an audit notice.