How to Obtain a Sales Tax Permit in the US (Step-by-Step)

Collecting sales tax without a permit is illegal in most states, and waiting too long to register can leave you paying tax you never collected from customers. If you are opening a store, launching an online shop or crossing a state’s sales threshold, knowing how to get a sales tax permit is one of the first compliance steps. This guide walks through when you need one, what to prepare and how the application works.

What Is a Sales Tax Permit?

A sales tax permit is the registration that authorizes your business to collect sales tax from customers and send it to the state. It gives you a sales tax account number, which you use to file returns and, in most states, to issue resale certificates when you buy inventory.

The name changes from state to state:

• California: seller’s permit, issued by the California Department of Tax and Fee Administration
• Texas: sales and use tax permit, issued by the Texas Comptroller of Public Accounts
• New York: Certificate of Authority, issued by the Department of Taxation and Finance
• Other states: sales tax license, vendor’s license, retail license or certificate of registration

Do You Need a Sales Tax Permit?

You generally need a permit in a state when both of these are true:

1. You sell taxable goods or services, and
2. You have sales tax nexus in that state, through a physical presence or by exceeding the state’s economic nexus threshold.

You do not need one in states with no sales tax such as Oregon or Delaware. Sellers who only sell through a marketplace may not need to register in some states, because marketplace facilitator laws make the platform responsible, but rules vary.

How to Get a Sales Tax Permit: Step by Step

Step 1: Confirm where you have nexus

List every state where you have an office, employees, inventory or significant sales. Register in your home state first, then in each state where you meet the nexus rules.

Step 2: Gather your business information

Most applications ask for:

• Legal business name, trade name (DBA) and business structure
• Federal Employer Identification Number (EIN), or Social Security number for some sole proprietors
• Business addresses and the date you started or will start selling in the state
• Owners, officers or members and their contact details
• What you sell, often as a NAICS code, and an estimate of monthly taxable sales
• Bank account details if the state requires electronic payment

Step 3: Apply with the state revenue department

Apply on the official website of the state’s tax agency. Avoid third-party services that charge high fees for a filing you can do yourself. Many states issue the permit for free; some charge a fee or, like California in certain cases, may ask for a security deposit.

If you need to register in several states, the Streamlined Sales Tax Registration System lets you register in all Streamlined member states with a single application.

Step 4: Register before you collect tax

Timing matters. New York, for example, requires businesses to register at least 20 days before they begin doing business, and operating without a Certificate of Authority can cost up to $10,000 in penalties. Collecting sales tax without a permit is not allowed in most states, and selling without one can lead to penalties.

Step 5: Display the permit and note your filing frequency

Many states require the permit to be displayed at your place of business. The approval notice usually tells you whether to file monthly, quarterly or annually. See our guide to sales tax filing deadlines.

After You Get Your Permit

• Charge the right rate. Most states tax the sale at the buyer’s location, so use the combined rate for each address. Our sales tax calculator and rates by state show the state, county, city and district rates.
• Keep records of every sale, the tax you collected and any exemption certificates you accepted.
• File every return on time, even when you had no sales, if your state requires zero returns.
• Update or close your account when you move, change ownership or stop selling.

Real-World Example

A candle maker in Austin sells at local markets and through her own website. She registers with the Texas Comptroller for a sales and use tax permit before her first market, then charges the local rate at each event. When her online sales to Florida customers pass Florida’s economic nexus threshold, she registers with the Florida Department of Revenue and begins charging Florida sales tax and county surtax on orders shipped there.

Conclusion

Knowing how to get a sales tax permit comes down to three things: identify where you have nexus, apply with each state revenue department before you collect, and keep up with filing once you are registered. Start with your home state, then use our state sales tax pages and Tax Rate Center tools to charge the right rate everywhere you sell.

Related: registering in several states? Read how to handle multi-state sales tax registration and filing.

Related: once registered, follow our ecommerce platform sales tax setup guide for Shopify, WooCommerce and BigCommerce.

Frequently Asked Questions