How to Register for a Sales Tax Permit in Other States

You run an online store from Ohio, and your dashboard just told you that you've sold more than $500,000 to Texas customers this year. You've never filed anything in Texas. Do you need a sales tax permit there today, did you need one last month, or can it wait until the end of the quarter?

Here is where you want to be instead. You know which states need a permit from you and the date each one has to be active. You know what to have on hand before you apply and how to register in several states with one form. And you know which filings start the moment the sales tax license arrives.

This guide walks through sales tax registration in the order it actually happens for an online seller.

This post is for online stores, SaaS companies and digital sellers who owe sales tax in states where they have no office. The steps below are the same in every state. Where the details differ, we link to our state guides.

What a sales tax permit is, and what states call it

A sales tax permit is a state's authorization for your business to collect sales tax from buyers and send it to the state. Registering also opens your account with that state's tax agency, which is where every future return gets filed.

States don't agree on the name, which is why searches split across half a dozen terms. All of these describe the same registration:

• Sales tax permit: the Texas Comptroller uses this term. See our Texas registration guide.
• Seller's permit: California's term, issued by the CDTFA. See the California registration guide.
• Certificate of Authority: New York's term, issued through New York Business Express. See the New York registration guide.
• Sales tax license: the most common alternative name on state forms and agency pages.
• Sales and use tax permit, sales tax ID or sales tax number: variants you'll meet on application forms and supplier paperwork.

A sales tax license is not the same as a general business license, which many cities require whatever you sell. It isn't your EIN either, which is a federal ID for income tax and payroll. And it isn't a resale certificate, which lets you buy inventory tax-free.

Five states have no statewide sales tax at all: Alaska, Delaware, Montana, New Hampshire and Oregon. Alaska still lets its cities and boroughs levy their own, as our post on whether every state has a sales tax explains.

When you need a sales tax permit

The rule is short. You register in a state once you have nexus there, and before you make the first sale on which you have to collect. The Streamlined Sales Tax Governing Board puts it plainly on its registration page:

You are required to register in each state in which you have met the physical or economic nexus standards.

Physical nexus comes from things you have in a state: an office, staff, or inventory, including stock held in a fulfillment warehouse. Our guide to the types of US sales tax nexus covers each one.

Economic nexus is the one that catches online sellers. Since the Supreme Court's 2018 Wayfair decision, a state can require you to register based on sales volume alone. The threshold is set state by state:

• California: remote sellers whose sales into the state exceed $500,000 in the current or preceding calendar year must register, according to the CDTFA.
• Texas: the same $500,000 figure applies over the preceding twelve months. Once you pass it, the Comptroller expects you to collect no later than the first day of the fourth month after.
• Most other states: a lower figure, and some also count transactions. Your state's guide lists its current threshold.

Marketplace sales change the picture. In most states, Amazon, Etsy or eBay collect the tax on sales they facilitate. Texas, for instance, doesn't require a permit from a remote seller whose only sales go through a marketplace that collects for it. It still expects four years of records.

Your own website is a different matter. Sales there need your own permit once you have nexus, and our post on marketplace facilitator laws explains how the two interact.

What you sell matters as much as how much. Not every state taxes software, streaming or downloads. Crossing a threshold in a state that doesn't tax your product may leave you with nothing to register for. Check how states treat SaaS and digital products before you file anything.

One clarification for anyone who just set up a company: forming an LLC or getting an EIN doesn't register you for sales tax anywhere. The state where you formed your LLC doesn't decide where you owe either. That depends on where your customers are. Our guides to choosing an LLC state and getting an EIN cover the setup side.

Registering on time only works if you know the day you cross a threshold. That's the job of Quaderno Monitor, which tracks your sales by state across Stripe, Shopify and your other channels, and warns you before you owe.

You need the permit before the first taxable sale, not after the first return is due.

What you need before you apply

Every state's application asks for broadly the same details. Gather them first and you can usually finish in one sitting:

• legal business name, any trade name (DBA), and entity type
• EIN, or a Social Security number for a sole proprietor
• business address and mailing address
• names, addresses and Social Security numbers of owners or officers
• a description of what you sell, often as a NAICS code
• how you sell: your own site, marketplaces, or both
• the date of your first sale in the state, or the date you crossed its threshold
• your estimated monthly sales into the state
• a bank account for tax payments

The date question deserves care. It sets your permit's effective date. If that date is earlier than today, it also tells the state which past periods you owe tax for. The section on registering late covers what to do if that applies to you.

Missing an SSN slows things down in some states. The Texas online application, for example, can't be used by an owner or officer without a Social Security number. Those applicants file a paper form instead.

Three ways to register for a sales tax permit

Once your details are ready, you have three routes. Most sellers end up combining them.

1. Apply through each state's portal

Every state with a sales tax runs its own registration, almost always online, through its Department of Revenue or equivalent agency. California calls its system "a secure, convenient, fast, and free way to register online for a permit." Approval times range from immediate to a few weeks. Our state guides link straight to each portal.

2. Register in many states at once with SSTRS

The Streamlined Sales Tax Registration System (SSTRS) is one sales tax registration for several states. The Governing Board calls it "a simple and free system" for registering in its member states. You can register in all 23 full member states or only the ones you pick. Our explainer on Streamlined Sales Tax covers how the agreement works.

The board keeps the current list of member states. It includes Georgia, Michigan, New Jersey, Ohio and Washington. California, Texas, New York and Florida are not members, so you still apply for a sales tax permit in those states directly.

SSTRS saves you the applications, not the returns. Each state still gets its own filing.

3. Have someone register for you

An accountant or a compliance service can file the applications on your behalf. Quaderno registers you in each new state for $0, or takes over the permits you already hold, as part of its filing service. Filing runs at $70 per state per month once you're registered.

Route	Covers	Cost to register	Best when
State portal	One state per application	Often free; some states charge a fee or ask for a deposit	You need one or two states, or a non-member state
SSTRS	Any of the 23 full member states in one form	Free	You've reached nexus in several member states
Done-for-you service	Every state where you need a permit	$0 with Quaderno; varies by provider	You'd rather hand over registrations and returns together

Fees are low where they exist. California charges nothing for a seller's permit, but it may ask for a security deposit to cover tax a business might leave unpaid if it closes. The amount is set when you apply.

What you owe once your permit is active

Approval is the start of the work. From the effective date on your sales tax license, you charge sales tax on taxable sales into that state. You also file returns on the schedule the state gives you.

The state usually sets that schedule from your expected volume. Texas, for example, tells new permit holders by letter whether they'll file monthly or quarterly. Higher-volume sellers generally file more often.

Zero returns are the trap. A quiet month doesn't excuse a return. The Streamlined board's registration page is explicit:

Returns must be filed even if you have no sales in that state.

Skip enough of them and you collect late-filing penalties for periods when you owed nothing.

Keep records too. Hold on to invoices, exemption certificates and marketplace reports, because they're your evidence if a state opens a sales tax audit.

Filing itself has its own guide: how to prepare a sales tax return. Quaderno's filing turns your sales data into return-ready figures for each state, or files them for you.

If you should have registered already

Plenty of sellers find out about nexus months after they crossed the line. Registering now stops the exposure from growing, but it doesn't erase what came before. The Streamlined board notes that, except in states offering amnesty, registering through its system:

does not relieve you of any tax liability you may have relating to prior sales or purchases.

You have two realistic options:

1. Register and pay back tax from the date you crossed the threshold, plus interest and possibly penalties. This is simplest when the gap is short and the amounts are small.
2. Apply for a voluntary disclosure agreement (VDA). Under a VDA, the Multistate Tax Commission explains, you pay back tax and interest for a limited "lookback period". In return, the state partially or completely waives penalties and won't assess tax for earlier periods. Each state sets its own lookback, and the MTC's program lets you apply to several states in one process.

There's a catch on timing. Under the MTC's rules, prior contact with the state about that tax disqualifies you from voluntary disclosure. Contact includes filing a return, paying tax, or receiving an inquiry from the state. So decide on your approach before you file anything there or answer a state letter.

If the back tax runs to more than a few months of sales, talk to a tax advisor first.

When to close or change a sales tax permit

A sales tax permit doesn't lapse because your sales drop. As long as it's open, the state expects returns, zero returns included. A permit you no longer need still costs you a filing every period.

Close it when you stop selling into the state, or when you've fallen below its threshold and the state lets you deregister. Rules on deregistering differ, so check the state's guide before you cancel.

Tell the state when your business changes, too. California's CDTFA, for example, asks you to contact it whenever you buy, sell or discontinue a business. In practice:

• New owner or new entity: usually a new sales tax registration, not a transfer of the old one
• New address or new product lines: normally an update to your existing account

The cheapest permit is the one you never needed. Registering "just in case" in states where you have no nexus adds a return for every period, with nothing to collect.

Register where you owe, and only there

A sales tax license is quick to get once you know where. Knowing where is the hard part. Quaderno Monitor tracks your sales in every state across your channels and warns you before you owe. When a new state needs a permit, our team registers you for $0 and files your returns from then on.

Find out which states need a permit from you before they find you.