Steps to Register for a Sales Tax Permit
Step #1: Check Your Eligibility
Generally speaking, you’re required to hold a valid sales tax license in every state where you have a “nexus,” i.e. where you have some form of business operations.
That nexus can be physical, such as a physical office, warehouse location, employees or other tangible connection. But thanks to the Supreme Court’s June 2018 South Dakota vs Wayfair decision, a nexus can also be economic in nature. They're calling it (surprise) the economic nexus.
Take the state of Michigan. According to its Treasury department, an economic nexus is created when remote sellers sell more than $100,000 or conduct more than 200 transactions in the state.
You might also be off the hook if you’re selling into one of the five US states — Alaska, Delaware, Montana, New Hampshire, and Oregon — that don’t have a state sales tax (though you’ll need to be sure you’re in compliance with any local sales tax obligations in these areas).
Check out this complete list of state and local taxes in the US.
Step #2: Find the State’s Registration Forms
Once you’ve determined that, yes, you do have to register for sales tax in a given area, you’ll need to file the appropriate forms with the state or local governing body.
Some states make this easier than others. In Texas, for example, you can complete the sales tax permit application online. In other states, you may still need to file paper forms — even if online registration options exist. Keep in mind that some states might refer to it as a "sales tax license" or a "seller's permit."
If you need to register in a new place, check out our tax registration guides by state.
Step #3: Remain in Compliance
Registering for a sales tax permit isn’t enough. In order to remain in compliance, you may need to renew your license. For instance, in Colorado, you’ll need to renew once every two years — and you’ll have to pay a $16 fee each time.
You’ll also have to make sure you report all sales or use tax obligations on time, which includes filing US sales tax returns. If you miss a deadline, you may be subject to fines, penalties, and possible revocation of your license.
For a complete breakdown of all the requirements after you get that seller's permit, check out this handy article: What You Must Know About Sales Tax if You Have Customers in the United States.
If you sell in one state, you can probably manage these requirements on your own. But as soon as you start selling into other areas, keeping on top of your various tax obligations can get frustrating. Find out how Quaderno can simplify the process of keeping you compliant.
VAT number USA
If you're looking for how to get a VAT number in the US, here's your answer. There are no VAT numbers in the United States! That's because the US doesn't have value-added tax.
Instead of a VAT number USA businesses receive this sales tax permit, along with a business tax ID. And since sales tax operates on a state level (not the national level), businesses have a different tax ID for each state where they’re registered.
If you think you might need to register for sales tax in the US, then check the steps and resources mentioned above. We'll get it sorted!
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.