How often do I have to renew my sales tax permit?
When you’re obligated to collect sales tax in a state because of nexus, the first thing you’ll need to do is apply for a sales tax permit. These permits are issued by most states, but the rules for getting them, paying for them, and renewing them are all different.
For instance, some states charge sellers for a sales tax permit, while others offer them at no cost. For states that charge for the permits, most fees run between $5 and $100. (Here’s a state-by-state list of renewal fees.)
In addition to keeping up with the registration processes and fees, you’ll need to understand each state’s requirements for renewal. And as you’ve probably guessed by now, each state’s renewal policy is different.
Here’s an idea of what kinds of renewal policies you’ll find for sales tax permits.
No need to renew
Some states make it easy for sellers by automatically renewing their sales tax permits, or just issue one with no expiration date. Once you have a permit in these states, you won’t have to worry about it expiring. (Keep in mind that some states require you to update or apply for a new permit if you make substantial changes to your business such as changing its name or moving locations.)
- California: If you receive a sales tax permit in this state, you won’t have worry about renewing it unless you sell cigarette and tobacco products. If you do, you’ll need to renew that permit on a yearly basis.
- Michigan: Your permit in this state will automatically renew every year until you cancel it.
- Texas: The Texas State Comptroller will automatically renew your sales tax permit once you have an active one.
- Virginia: This is another state that does not require sellers to renew their sales tax permits. After you receive your permit, it will be good until you cancel it.
Yes, please renew
But what about the states that do require sellers to renew their permits? Again, every state has different rules about how to go about the process, but here are some examples of what you might find.
- Colorado: If you have a Colorado sales tax permit, you’re required to renew it every two years. Unfortunately, you’ll have to pay a $16 fee every time you do it.
- Indiana: This state also has a two-year renewal policy, but the state won’t charge you for the process.
- Louisiana: If your permit is about to expire in this state, you’ll have to renew it. But, you’ll have 60 days after the expiration date of the permit to have it renewed.
- Pennsylvania: This state makes it a little easier for sellers because permits only have to be renewed at least every five years.
That’s a lot to keep up with, isn’t it? You’ll need to get in touch with the department of revenue in the states where you’re registered to learn the rules. This list provides contact information for every state in the nation.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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