Sales tax permit

A sales tax permit (also called a seller's permit, sales tax license, or certificate of authority) is a state-issued registration that authorizes a business to collect sales tax from customers on taxable transactions. If your business sells taxable goods or services, you must register for a sales tax permit in each state where you have nexus (a tax obligation).

28 steps across 8 sections

1. Physical Nexus

  • A physical location (office, warehouse, store)
  • Employees or sales representatives in the state
  • Inventory stored in the state (including Amazon FBA warehouses)
  • Temporary physical presence (trade shows, pop-up shops — varies by state)

2. Option 1: Individual State Registration

  • Visit the state's Department of Revenue website
  • Complete the online registration form
  • Provide: business name, EIN, business address, type of products/services sold, estimated monthly sales
  • Receive your sales tax permit/certificate (usually free, some states charge a small fee or require a deposit)

3. Option 2: Streamlined Sales Tax Registration System (SSTRS)

  • Register in multiple Streamlined member states with one application at streamlinedsalestax.org
  • Free to register
  • 24 member states participate
  • Does not cover all states (CA, TX, NY, and others are not members)

4. What to Charge

  • State sales tax rate — varies by state (0% to 7.25%)
  • Local sales tax — county and city rates may apply on top of state rate
  • Combined rates can exceed 10% in some jurisdictions
  • Product taxability varies by state (e.g., groceries, clothing, SaaS, digital goods)

5. Origin vs. Destination Sourcing

  • Origin-based states (minority): charge sales tax based on where the seller is located
  • Destination-based states (majority): charge sales tax based on where the buyer is located
  • This matters significantly for businesses shipping to multiple locations

6. Filing Frequency

  • Monthly — high-volume sellers (typically $300+/month in tax)
  • Quarterly — moderate-volume sellers
  • Annually — low-volume sellers
  • Some states offer semi-annual filing

7. Filing Deadlines

  • Typically the 20th of the month following the reporting period
  • Late filings incur penalties and interest

8. How to File

  • Most states offer online filing through their Department of Revenue portal
  • Automated sales tax software (TaxJar, Avalara, Vertex) can file in multiple states
  • Some states require electronic filing for all businesses

Sources

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