Resources for Applying for a Sales Tax Permit by State

License to Sell: Your Guide to Applying for a Sales Tax Permit

Many businesses need to collect sales tax from customers. But before you can start collecting it, you must obtain a sales tax permit with the state. Find out how to apply for a seller’s permit by state to keep things legal. 

What is a sales tax permit?

A sales tax permit, or sales tax license, is a certificate that allows businesses to collect sales tax from customers. Businesses required to collect sales tax must apply for a permit to operate. In addition to sending a physical or electronic seller’s license, the state also assigns businesses a unique sales tax ID number.

Do you need a permit?

Again, you only need a permit if you’re required to collect sales tax. As a refresher, sales tax is a pass-through tax that is a percentage of a customer’s total bill. Customers are responsible for paying sales tax; sellers are responsible for remitting it.

Before applying for a sales tax permit with a state, verify that you must collect the tax. You must collect sales tax for a state if:

  • You have sales tax nexus (presence) in the state
  • The state has sales tax laws
  • The state applies sales tax to the products you sell

Five states do not have sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. Hawaii also does not have sales tax, but they do impose a general excise tax (GET). As a result, you must apply for a GET license. New Mexico also has a gross receipts tax (GRT) in place of a sales tax, so you will need to apply for a GRT permit.

Seasonal businesses aren’t off the hook when it comes to getting sales tax licenses. If you run a seasonal business, you must either apply for a temporary or permanent permit, depending on the state.

When should you get your sales tax permit?

You must apply for a sales tax permit before you can begin making sales in your business. Applying for a sales tax license is part of registering your business with the state.

Other responsibilities you may need to do before operating include registering your business, creating an unemployment insurance account, and setting up a new hire reporting account with the state.

Using your seller’s license

Once you receive your sales tax license and ID number from the state, you can begin selling your products to customers and collecting sales tax.

Include your seller permit number when remitting and reporting collected sales tax to the state.

Seller’s permit vs. resale certificate: What’s the difference?

You may have also heard about a resale certificate. Resale certificates are not synonymous with sales tax permits.

A seller’s permit allows a seller to collect sales tax from its customers. On the other hand, a resale certificate exempts a buyer from paying sales tax when they purchase goods.

Resale businesses or companies that use purchased goods as part of their offerings can apply for a resale certificate. When you purchase qualifying goods from a business, you do not pay sales tax. Instead, you will later collect sales tax on those goods from your customers.

If you decide to apply for a resale certificate, you still need to have a sales tax permit. That way, you can legally collect sales tax from your customers. Apply for a seller’s license before applying for a resale certificate.

How to apply for seller’s permit by state

Apply for a seller’s permit with the state you are responsible for collecting sales tax for. If you have sales tax nexus in multiple states, you may need to apply for more than one permit.

The application for obtaining a seller’s permit depends on the state. Some states charge businesses an application fee while others do not.

The application process for obtaining a sales tax permit varies by state, but there are a few general steps you have to take.

Before we get into the nitty-gritty of state-specific requirements for applying for a seller’s permit, take a look at some general steps:

  1. Gather business information
  2. Go to your state’s website
  3. Apply online or by mailing in a paper form
  4. Pay the seller’s permit fee, if applicable

What business information do I need?

Don’t start the application process without the right information. Most states require the following on the permit application form:

  • Business name
  • Business structure
  • Federal Employer Identification Number (FEIN)
  • Social Security number
  • Date you started doing business in the state
  • Filing frequency
  • Estimated sales subject to sales tax
  • Contact information (e.g., address, phone number)
  • Information about your products or services
  • Information about your employees

Keep in mind that this is general business information that may appear on your permit application form. You may need more or less depending on your state.

State forms, links, and fees

Use the chart below for links to the forms or online registration system as well as the cost to apply.

State How to Apply for a Sales Tax Permit Cost
Alabama Online: My Alabama Taxes (MAT) Free
Alaska No Sales Tax N/A
Arizona Online: AZTaxes User Account Registration
Mail: Arizona Joint Tax Application (JT-1)
Arkansas Online: Arkansas Taxpayer Access Point
Mail: AR-1R
California Online: Taxpayer Online Services Portal Free, but you may have to pay a security deposit
Colorado Online (businesses with one location): MyBizColorado
Mail: Colorado Sales Tax Withholding Account Application
License fee varies from $4 – $16, plus a $50 security deposit
Connecticut Online: Taxpayer Service Center $100
Delaware No Sales Tax N/A
D.C. Online: My Tax DC Free
Florida Online: Account Management and Registration
Mail: DR-1
Georgia Online: Georgia Tax Center Free
Hawaii Mail: BB-1 $20
Idaho Online: Idaho Business Registration System
Mail: Form IBR-1 Business Registration Form
Illinois Online: MyTax Illinois
Mail: Form REG-1
Indiana Online: INtax $25
Iowa Online: Business Tax Registration
Mail: Iowa Business Tax Permit Registration
Kansas Online: Kansas Department of Revenue Customer Service Center
Mail: Kansas Business Tax Application
Kentucky Online: Kentucky Business One Stop Portal
Mail: Kentucky Tax Registration Application
Louisiana Online: Louisiana Taxpayer Access Point
Mail: Application for Louisiana Tax Number (CR-1)
Maine Online: Tax Registration Services
Mail: Application for Tax Registration
Maryland Online: Maryland Combined Registration Online Application
Fax: Combined Registration Application (CRA)
Massachusetts Online: MassTaxConnect Free
Michigan Online: Online New Business Registration Free
Minnesota Online: Business Tax Registration Free
Mississippi Online: Taxpayer Access Point (TAP) Free
Missouri Online: New Business Registration
Mail: Form 2643
Bond based on your estimated sales tax
Montana No sales tax N/A
Nebraska Online: Register Your New Business Online
Mail: Nebraska Tax Application
Nevada Online: SilverFlume $15
New Hampshire No sales taxes N/A
New Jersey Online: NJ Business Gateway Services Free
New Mexico Online: Taxpayer Access Point (TAP)
Mail: Business Tax Registration Form
New York Online: New York Business Express Free
North Carolina Online: Online Business Registration
Mail: Form NC-BR
North Dakota Online: Taxpayer Access Point (TAP)
Mail: Application for Income Tax Withholding and Sales & Use Tax Permit
Ohio Online: Streamlined Sales Tax Registration System (SSTRS) Free
Oklahoma Online: Taxpayer Access Point (TAP) $20; $10 for additional locations
Oregon No sales tax N/A
Pennsylvania Online: Online Business Entity Registration (PA-100) Free
Rhode Island Online: RI Division of Taxation Combined Online Registration Service
Mail: Business Application and Registration
South Carolina Online: MyDORWAY
Mail: SCDOR-111
Free for online application.
$50 if mailing form
South Dakota Online: South Dakota Tax Application Free
Tennessee Online: Tennessee Taxpayer Access Point (TNTAP) Free
Texas Online: Texas Online Tax Registration Application
Mail: Texas Sales and Use Tax Forms
Potential security bond based on your application
Utah Online: OneStop Online Business Registration OR Taxpayer Access Point (TAP)
Mail: TC-69
Potential security bond based on your application
Vermont Online: Online Business Service Center
Mail: VT Form BR-400
Virginia Online: Virginia Tax Online Services for Businesses
Mail: Form R-1
Washington Online: My DOR
Mail: Business License Application
$19 business license application fee
West Virginia Online: WV One Stop Business Portal
Wisconsin Online: Bus Tax Reg OR One Stop Business Portal $20
Wyoming Online: Wyoming Internet Filing System
Mail: Sales/Use Tax License Application

Keep in mind that you may have to renew your sales tax permit, depending on your state. Contact your state for more information.

When you begin making sales, you can’t forget to record them in your books! Patriot’s online accounting software lets you streamline the way you record your business’s incoming money. Start your self-guided demo now!

Have more questions about running your small business? Head on over to our Facebook page to connect. We just might cover your question in our next article! 

This is not intended as legal advice; for more information, please click here.

Stay up to date on the latest accounting tips and training