How to Register for Sales Tax

Step 1: Determine Where You Have Nexus

"Nexus" is the connection to a state that triggers a sales tax collection obligation there. You can have nexus two ways:

• Physical nexus, from having an office, employee, warehouse, or inventory physically located in that state.
• Economic nexus, from exceeding that state's sales threshold, commonly around $100,000 in annual sales into the state, a standard most states adopted after the Supreme Court's 2018 decision in South Dakota v. Wayfair, Inc. Some states set a different dollar figure or add a transaction-count test.

Track your sales by state on an ongoing basis, since economic nexus is based on your actual sales volume and can be crossed well after your business has been operating.

Step 2: Confirm What You're Selling Is Taxable

Most states tax tangible goods by default, but treatment of services, digital products, and specific categories like groceries or clothing varies significantly by state. Check your specific state's taxability rules for your products before assuming everything you sell is taxed the same way everywhere.

Step 3: Apply for a Permit With Each State's Tax Agency

Once you know where you have nexus, apply for that state's sales tax registration through its department of revenue or equivalent tax agency, not the Secretary of State's office that handles business formation. The permit goes by different names depending on the state:

Most states let you apply online, often for free or a small fee, and many issue the permit quickly once the application is complete.

Step 4: Register Before You Start Collecting

Apply for your permit before your first taxable sale in that state, not after. Most states consider collecting sales tax without a valid, active permit a violation on its own, separate from any tax you may owe. If you've already crossed a threshold without registering, look at your state's voluntary disclosure program, which can reduce penalties for coming forward on your own rather than waiting to be caught.

Step 5: Understand Marketplace Facilitator Rules

Most states now have marketplace facilitator laws requiring large online marketplaces to collect and remit sales tax on behalf of third-party sellers using their platform. If you sell exclusively through such a marketplace, it may be handling collection for those specific sales, though you can still need your own registration if you also sell directly through your own website or other channels in that state.

Step 6: File and Remit on Your Assigned Schedule

Once registered, each state assigns you a filing frequency, commonly monthly, quarterly or annually, based on your sales volume in that state. File your return and remit the tax collected by each deadline, even in a period where you had no taxable sales, since most states still expect a "zero return" rather than no filing at all.

Step 7: Use Resale and Exemption Certificates Correctly

If you buy inventory to resell, you typically give your supplier a resale certificate so you aren't charged sales tax on goods you'll collect tax on when you sell them to the end customer. Keep these certificates on file, since a state revenue agency can ask for them during an audit to confirm an exempt purchase was legitimate.

Nexus Rules Change, and Thresholds Aren't Identical

Economic nexus thresholds and what counts toward them differ by state, and some states have adjusted their thresholds since first adopting them after Wayfair. Check each state's current rule directly rather than assuming a flat $100,000 figure applies everywhere.

Registering Triggers Other State Obligations Too

A sales tax registration can flag your business to the state for other purposes, such as corporate income tax nexus or annual report requirements if you're also foreign-qualifying to do business there. Treat a new sales tax registration as a signal to check your broader compliance picture in that state, not an isolated task.

Closing a Registration You No Longer Need

If your sales in a state drop below the threshold or you stop selling there, most states require formally closing the sales tax account rather than simply letting it go inactive, to avoid continuing to owe filings you no longer need.

This Is Not Tax Advice

Whether you have nexus in a specific state, how your specific products are taxed, and how to handle a sale you may have made before registering are all fact-specific questions. Talk to a tax professional familiar with multi-state sales tax if you sell in more than a few states.