A woman in a business suit looking at a stack of paperwork labelled Tax Permits

What are sales tax permits and does your business need one?

Every state with a sales tax requires businesses to register for a sales tax permit before collecting and remitting sales and use tax in the state. Yet businesses aren’t necessarily required to hold a sales tax permit or collect sales and use tax in all states where they make sales. How do you know whether you need a sales tax permit? How do you go about getting one if you do?

This article covers the basics:

What is a sales tax permit?

A sales tax permit is a document that authorizes a business to make taxable retail sales and collect sales tax from customers. Other terms for “sales tax permit” are retail license, sales tax license, sales and use tax permit, seller permit, seller’s permit, or vendor’s license. 

In most states, businesses act as intermediaries and collect sales and use tax on behalf of the state. In a handful of states, tax is imposed on the business itself, which can pass it on to the customer. Thus:

  • Arizona has a transaction privilege tax (TPT) license

  • Hawaii has a general excise tax (GET) license

  • New Mexico requires businesses that make taxable sales of tangible personal property in the state to register to obtain a New Mexico Business Tax Identification Number for gross receipts tax (GRT)

There’s no statewide sales tax in Alaska, Delaware, New Hampshire, Montana, or Oregon. However, many cities and boroughs in Alaska, including Ketchikan, have a local sales and use tax and require certain businesses to register for sales tax.

Businesses also typically need one or more state or local business licenses. Exact requirements vary depending on the location and nature of your business. 

Who needs a sales tax permit?

You’re required to hold a seller permit in states where you have nexus, which is basically a connection with a state that’s significant enough to trigger a sales tax obligation.

There are several ways for a businesses to establish nexus with a state:

  • Economic activity in the state (e.g., $100,000 in sales or 200 transactions in the state during the current or previous calendar year) 

  • Physical presence in the state (e.g., employees, inventory, real property)

  • Referrals from in-state entities 

  • Ties to affiliates in the state 

States can require a business to register as soon as nexus is established, so it’s important to track your nexus in the states where you make sales.

Some states may require you to get a temporary or occasional sales tax permit if you occasionally or temporarily make sales in the state. For example, while you don’t need a sales tax permit if you only sell one or two taxable items during a 12-month period in Texas, you may need a Texas sales tax permit if you make three or more sales of taxable tangible personal property in the state during a 12-month period.

Nexus can last longer than you think, so be sure to confirm you no longer have nexus with a state before allowing your sales tax permit to expire.

Do online businesses need a seller’s permit?

Like brick-and-mortar businesses, online businesses must obtain a seller’s permit and comply with all applicable sales and use tax requirements in states where they have nexus. Since nexus can be established through affiliates (affiliate nexus), sales or transaction volume (economic nexus), or referrals (click-through nexus), you can have nexus in states where you don’t have a physical presence.

That said, some states provide an exception for out-of-state, online businesses that only sell through a registered marketplace facilitator.

Do marketplace sellers need a sales tax permit?

All states with a general, statewide sales tax now require marketplace facilitators that have nexus to register for a seller’s permit then collect and remit sales tax on behalf of third-party (marketplace) sellers. 

Registration requirements for marketplace sellers vary depending on the state and the circumstances. In Iowa, for example:

  • An in-state marketplace seller is required to register for a sales tax permit even if it only sells through a registered marketplace that handles sales tax on its behalf

  • A remote marketplace seller is not required to register for a sales tax permit or file returns with the Iowa Department of Revenue if it only sells through a registered marketplace that handles sales tax on its behalf

  • A remote marketplace seller is required to register for a sales tax permit and file returns if it also makes direct sales into Iowa and has nexus with the state

How do you get a sales tax permit?

Obtaining a seller permit is more straightforward in some states than others, though it’s in every state’s best interest to make the process as simple and streamlined as possible. Often, the biggest hurdle is finding the information you need on the department of revenue website.

Most states now encourage businesses to register for a seller’s permit online; it tends to be the quickest option. Registering by mail or in person is typically allowed but often discouraged.

You usually need to provide a lot of information when registering for a sales tax permit, including:

  • The name and address of your business, along with a description of the business

  • The name and address of each business owner

  • Your Federal Employer Identification Number (EIN) and Tax ID number

  • Your social security number

  • Your banking information

  • The North American Industry Classification System (NAICS) codes for products you sell

  • An estimate of your annual sales in the state

It can take up to four weeks to obtain your sales tax permit once you complete your registration, so plan accordingly.

Businesses with a physical presence in the state are required to post their sales tax permit in a conspicuous place. Different requirements may exist for remote sellers.

Do I need to renew my sales tax permit?

Sales tax permits in some states (e.g., California and Texas) are good for as long as you own your business. In other states (e.g., Connecticut and Pennsylvania), sales tax permits expire and need to be renewed. 

See our state-specific sales tax permit information below for more details.

What’s the difference between a sales tax permit and a resale certificate?

A sales tax permit authorizes a business to collect and remit sales tax on taxable sales of products and services, as required by law.

A resale certificate allows a business to make tax-free purchases of taxable goods they plan to resell. The resale certificate prevents goods from being taxed twice. Sellers that fail to obtain a resale certificate to validate tax-exempt sales could be held liable for the uncollected tax.

How much do sales tax permits cost (in 2024)?

The cost of a sales tax permit varies by state and is subject to change.

StateCostRegistration method and notes
Alabama$0

Online registration only.

It’s free to register for an Alabama sales tax permit, but other business registration fees may apply. 

Licenses must be renewed annually.

Alaska$0 for remote sellers

Online registration only for remote sellers.

There’s no state sales tax in Alaska, but some jurisdictions impose a local sales tax and fees may apply.

Remote sellers should register through the Alaska Remote Seller Sales Tax Commission.

Arizona$12 state fee; various local fees for in-state businesses

Online registration preferred.

Arizona TPT licenses are valid for one year and must be renewed annually by January 1. Businesses with more than one location must renew their TPT licenses online. 

Renewal fees may apply for in-state businesses but there’s no renewal fee for remote sellers and marketplace facilitators.

Arkansas$0 or $50

Online registration preferred.

$50 per location for in-state businesses; there is no application fee for remote sellers. Permits remain active until the taxpayer requests cancellation.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

California$0

Online registration only.

It’s free to register for a California seller’s permit but a security deposit may be required.

Permits are valid for as long as you’re actively engaged in business as a seller.

Colorado$4–$16, plus a $50 deposit

Online registration preferred for remote sellers.

The cost to register for a two-year Colorado sales tax license is prorated depending on the date of issuance, plus a one-time $50 deposit. The deposit is automatically refunded to the business after $50 in state sales tax has been remitted to the department. Additional fees may apply in self-collected jurisdictions. There’s no charge or deposit for a retailer’s use tax license.

Licenses are valid for a two-year period and expire at the end of each odd-numbered year. All active Colorado sales tax licenses expire on December 31 of odd-numbered years (the next expiration date is December 31, 2025) and will need to be renewed.

Connecticut$100

Online registration only.

Connecticut sales and use tax permits expire every two years but are automatically renewed and mailed at no cost by the Connecticut Department of Revenue Services, as long as an account is active and in good standing.

DelawareN/AThere’s no general state sales tax in Delaware. Other registration requirements may apply.
Florida$0

Online registration preferred and required for remote sellers

It’s free to register for Florida sales tax online; a small fee may apply when registering by mail.

Georgia$0

Online registration only.

Georgia sales and use tax numbers don’t need to be renewed; they remain in effect as long as the business entity exists with no change in ownership or structure.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Hawaii$20

Online registration preferred.

There is a one-time $20 fee to register for a Hawaii general excise tax (GET) license. Depending on the licenses needed, additional fees may apply.

Idaho$0

Online registration preferred.

Idaho sales tax permits generally don’t expire.

Illinois$0

Online registration preferred.

There’s no fee to register a business in Illinois, but there are license fees for some businesses with tax responsibilities. 

The Illinois Certificate of Registration expires after one year and will be renewed automatically for businesses that comply with all filing and payment requirements. Other licenses expire at different times.

Indiana$25

Online registration only.

The cost to register for an Indiana Registered Retail Merchant Certificate (RRMC) is $25 per location. It’s valid for two years and updates automatically (for businesses in good standing) with no additional charge for renewal. If a business does not pay its tax liability, the RRMC will expire.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Iowa$0

Online registration preferred.

It’s free to register for an Iowa sales and use tax permit. Once issued, a permit is effective until canceled by the owner or revoked by the Iowa Department of Revenue.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Kansas$0

Online registration preferred.

It’s free to register for a Kansas sales and use tax permit through the Kansas Department of Revenue. Kansas sales tax permits do not expire.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Kentucky$0

Online registration preferred.

It’s free to register for a Kentucky sales and use tax permit through the Kentucky Department of Revenue. Kentucky sales tax permits do not expire. 

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Louisiana$0

Online registration required for remote sellers.

It’s free for remote sellers to register online through the Sales and Use Tax Commission for Remote Sellers. In-state businesses register through the Louisiana Department of Revenue

There’s no fee to register with the state but parishes may impose additional requirements and fees.

Maine$0

Online registration preferred.

It’s free to register for sales tax in Maine. Retailer certificates generally do not expire.

Maryland$0

Online registration preferred.

It’s free to register for a Maryland sales and use tax license.

Maryland sales tax licenses generally do not expire.

Massachusetts$0

Online registration only.

Massachusetts sales tax permits generally do not expire.

Michigan$0

Online registration preferred.

Michigan sales tax licenses are valid January through December of the tax year listed on the license. The Michigan Department of Treasury issues sales tax licenses yearly.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Minnesota$0

Online registration preferred.

It’s free to register for a sales and use tax account in Minnesota. 

Minnesota sales tax licenses do not expire but can be revoked if businesses do not comply with sales and use tax laws.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Mississippi$0

Online registration only.

It’s free to register for a Mississippi sales tax permit.

Sales tax permits don’t expire or require renewal provided the holder continues in the same business at the same location (a separate permit is required for each location). However, some businesses may be required to post a Sales Tax Bond or Surety Tax Cash Bond.

Missouri$0

Online registration preferred.

It’s free to register for a Missouri sales tax license.

MontanaN/AThere’s no general sales tax in Montana. Other registration requirements may apply.
Nebraska$0

Online registration preferred.

It’s free to register for a Nebraska sales tax permit. A separate permit is required for each business location in the state. 

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Nevada$15

Online registration preferred.

There is a $15 fee per location to register for a Nevada sales tax permit. Some businesses are required to submit a security deposit as well.

Retailers with no physical presence in the state must pay a minimum fee of $15 and should register for a certificate of authority through NevadaTax. 

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

New HampshireN/AThere’s no general sales tax in New Hampshire. Other registration requirements may apply.
New Jersey$0

Online registration preferred. It’s free to register for a New Jersey sales tax permit (Certificate of Authority) through the New Jersey Division of Taxation.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

New Mexico$0

Online registration preferred

It’s free to register for a New Mexico Business Tax Identification Number.

New York$0

Online registration preferred.

It’s free to register for a New York State sales tax Certificate of Authority. You must register with the New York State Department of Taxation and Finance at least 20 days before you begin business.

North Carolina$0

Online registration preferred.

It’s free to register for a North Carolina Certificate of Registration through the North Carolina Department of Revenue.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

North Dakota$0

Online registration only.

It’s free to register for a North Dakota sales tax permit through the North Dakota Office of the State Tax Commissioner. You should apply for a permit at least 30 days prior to opening for business.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS). 

Ohio$0 or $25

Online registration preferred.

The cost for in-state vendors to register for an Ohio vendor’s license is $25, and a separate license is required for each fixed place of business. The license is free for out-of-state sellers that make taxable retail sales in the state.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Oklahoma$20+

Online registration preferred.

It costs $20 plus a handling fee to register for an Oklahoma sales or use tax permit online through the Oklahoma Tax Commission. Permits for additional locations cost $10 each.

The license must be renewed every three years by the date the permit was issued. This video provides more details.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

OregonN/AThere’s no general sales tax in Oregon. Other registration requirements (e.g., for the bicycle excise tax) may apply. See the Oregon Department of Revenue for details.
Pennsylvania$0

Online registration only.

It’s free to register for a Pennsylvania sales tax license.

The license must be renewed every five years.

Rhode Island$0

Online registration preferred.

It’s free to register for or renew a Rhode Island retail sales tax license. Sales tax permits are valid from July 1 through June 30; renewal applications are due each year by February 1.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

South Carolina$50

Online registration preferred.

The cost to register for a South Carolina retail license is $50, and a separate retail license is required for each location. 

The license is valid for as long as the same retailer operates the business at that location (unless revoked by the Department of Revenue). Separate local business licenses may also be required.

South Dakota$0

Online registration only.

It’s free to register for a South Dakota sales tax license through the South Dakota Department of Revenue.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Tennessee$0

Online registration only.

It’s free to register for sales and use tax in Tennessee through the Tennessee Department of Revenue. In-state businesses must pay a separate $15 business license registration fee to a county and/or clerk’s office for each new business.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Texas$0

Online registration preferred.

It’s free to register for a Texas sales tax permit. However, businesses may be required to post a security bond.

Utah$0

Online registration preferred.

It’s free to register for a Utah sales and use tax license through the Utah State Tax Commission.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Vermont$0

Online registration preferred.

It’s free to register for a Vermont sales and use tax license through the Vermont Department of Taxes.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Virginia$0

Online registration preferred.

It’s free to register for a Virginia sales tax certificate of registration through the Virginia Department of Taxation.

WashingtonVariable

Online registration preferred.

The cost to obtain a business license in Washington varies depending on the licenses needed.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Washington, D.C.$0

Online registration only.

It’s free to register for sales and use tax in Washington, D.C.

West Virginia$30

Online registration preferred.

For most businesses, the cost to register as a business in West Virginia is $30. Transient vendors must post a security deposit (bond, cash, certified check, or irrevocable letter of credit) in the amount of $500.

Remote sellers with no physical presence in West Virginia may use a simplified Remote Seller Registration on MyTaxes.

Wisconsin$20

Online registration preferred.

A $20 Business Tax Registration (BTR) fee must be paid to obtain a Wisconsin seller’s permit, which is good for two years. A $10 renewal fee is due at the end of the two-year period. 

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

Wyoming$60

Online registration preferred.

The cost to register for a Wyoming sales and use tax license is $60.

Qualifying remote sellers can register through the Streamlined Sales Tax Registration System (SSTRS).

 

Failing to register your business as required — or registering where you aren’t required to register — can create compliance problems and even trigger financial penalties or criminal charges. Avalara Sales Tax Registration can help you secure the sales tax permits you need in any or all states, including Streamlined Sales Tax states.

 

Updated January 30, 2024.

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