Published February 5, 2025
Your Guide on Registering for a Sales Tax License
All posts
New growth means new sales tax obligations. As exciting as it is to expand into new markets, there are boxes to check and tasks to tackle to make sure that your business stays compliant with sales tax responsibilities. The most common question we hear is, “How do I register for a sales tax license?”
Below, we will discuss everything you need to know to register your business for a sales tax license successfully and what to expect throughout the process.
You must register for a sales tax license when you have nexus in any jurisdiction or geographic area. The tricky part is recognizing when you meet one of the many requirements for nexus across the country.
One of the easiest triggers to remind you that you need to register your business for a sales tax license is if it has a new physical presence. Physical presence could be defined as a warehouse, office, store location, distribution center, or even having employees living in that jurisdiction.
However, you may meet the requirements for economic nexus without a physical presence. If you deal heavily in online sales, this is where you find new sales tax obligations crop up quickly. Economic nexus is commonly set as a threshold of volume or dollars of sales. The most common is $100,000 in sales or 200 transactions per year, but it can vary. California, for example, measures economic nexus by $500,000 in sales alone.
Once you meet the economic nexus, it’s time to register for a sales tax license to avoid missed payments or getting hit with significant fines.
As you work to get your business compliant with all your sales tax responsibilities, you’ll become familiar with how to recognize the signs you need to register in a new state. Physical nexus is an easy one to track, but you might need to get more detailed information if you are tracking online sales. However you do business, getting the right tools in place can help you have a successful relationship with sales tax.
Follow these eight steps to get registered for a sales tax license.
Start by collecting the information you’ll need to register for your sales tax license. To speed the process along, have your EIN (employer identification number), business details (address, owner, type of business), and personal information of the business owner handy.
If you suspect that you have met economic nexus in a new jurisdiction, research to determine if you will now owe sales tax. This should be easy to identify. Look for areas where you have a significant connection or any type of physical presence.
Take a quick trip over to the state tax website to learn more about their nexus requirements and sales tax rates. Always look for the official website over third-party sites for the most accurate information. Look for sections on business registration or sales tax.
Looking for a head start? Here are a few quick links to these states’ sales tax registration page:
Most states provide an online application form to apply for your sales tax license. You’ll be asked for much of the information you gathered in step one (business name, type, location, size, etc.). The more accurate and complete your information, the faster this step will be.
You may be asked to submit additional documents along with your application. That could include your business license or EIN confirmation letter. Some states require a small fee during the application process, so be prepared to make that payment.
Once your application is submitted, you’ll wait until everything is approved. The length of this step varies from state to state. Some state websites provide updates about where your application is in the process, for other states, you’ll just have to wait.
Once approved, you’ll receive your sales tax certificate. This is proof that your business is able to collect sales tax in the state. File this away safely with other important tax and business license documentation. You’ll need it in the case of an audit.
Successful sales tax compliance doesn’t stop there. You are responsible for collecting the right rate of sales tax across the tax, so carefully track applicable jurisdictions and rates. Additionally, states have different timetables for sales tax payments, so make sure that you are well versed in your sales tax deadlines.
While the process is straightforward enough, sales tax itself is complex enough to warrant plenty of questions. No one wants to be caught unprepared or underpaying sales tax. Our goal is to help you feel confident about your sales tax compliance by answering any of your questions. These are just a few of the most commonly asked questions about how to register for a sales tax license.
A sales tax license number is also referred to as a resale license/seller’s permit. It is issued by the state where you are doing business to grant you the authority to conduct business and collect and remit sales tax. Your EIN is commonly referred to as your federal tax ID number and is different from a sales tax license/resale license/seller’s permit.
You can apply for a sales tax permit on the state tax website for the state in question. In most cases, the entire process can be completed online. You’ll receive a physical copy of your sales tax license to file for your records.
Contact the state’s tax department in order to find your sales tax ID number. It should also be listed on any mail you’ve received from the state tax department. You’ll want this information in the case of an audit.
Not unlike other documents you receive from local or state government agencies, your sales tax license will list your business, location, and type of business, as well as your sales tax ID number for the state. Often, it is a small certificate, less than a full sheet of paper.
If your growth is at a manageable level, you may be able to successfully handle new state registrations as they become relevant. However, if you are experiencing rapid growth or facing backlogs of non-compliance, even a task as simple as registering in a new state may feel overwhelming.
The good news is that there are tools for you to tackle sales tax registrations, even if you need it in dozens of states. Make sure you have all your documentation and information locked and ready to go as start this process.
Unfortunately, it is easy to miss when you hit nexus in new jurisdictions if you aren’t watching for it. To avoid missteps, regularly conduct nexus reviews, especially when expanding into new markets or increases in sales. You can use nexus tracking tools to help you monitor sales.
Failing to fill out your application with the required information can turn a simple process into a much more complicated issue. In a situation where you want to take prompt action, accuracy is critical for a smooth application process. This is why we suggest having all of your business information gathered, updated, and ready before you begin the application process.
You could be facing fines if you delay registering for your sales tax license. Begin your application process as soon as you hit nexus to avoid incurring more fees. Unfortunately, state laws around nexus change, so you also need to be aware of changes that may affect your sales tax responsibilities.
With the ongoing changes around sales tax, it’s important to not view sales tax as a “set it and forget” process (if you’re managing it internally). Businesses can quickly slip into non-compliance if they aren’t tracking new legislation, changing rates, and nexus requirements.
Staying compliant with your sales tax and getting those applications in is about more than taxes and processes. It all feeds into building positive and trustworthy relationships with customers and vendors when you manage your sales taxes with accuracy and timeliness.
So as daunting of a task as it may appear, staying organized and informed about sales tax (with helpful guides like this) can help you make this a hassle-free process. But if you still have concerns, the best way to make sure that every sales tax license application is accurately and promptly filed is to have the sales tax people on your side. From mergers and acquisitions to periods of rapid expansion, our team has been helping businesses streamline their sales tax process into a manageable aspect of their financial strategy. Get started with a free consultation where you can ask us all of your hard-hitting sales tax questions and get clarity about the best steps to take your business further.
We care about your data – privacy policy
