Wondering whether or not you should apply for a Sales Tax License, but you’re not sure how it works or if you are required to do so? Each state has different rules and regulations for business owners, and then there are the five NOMAD states that don’t have a sales tax; New Hampshire, Oregon, Montana, Alaska and Delaware.

There is not one rule that applies at the national level regarding sales tax, and it’s all a little confusing as some states require the consumer to self-report tax if a vendor doesn’t collect it at checkout. 

What Is a Sales Tax License?

Essentially, a sales tax license is a permit or registration that business owners must obtain if they’re selling goods and services within certain US states. This is a different license than your business license, which allows you to operate your business, in comparison to a sales tax license (otherwise known as a ‘sales permit’, or ‘sales tax permit’) which allows you to collect sales tax from your customers. You must be sure to register in each state that you owe sales tax.

How Do I Know Which States To Register In For Sales Tax?

If you have created Nexus in a state, you will be required to pay sales tax. You might be wondering ‘what is nexus?’, don’t worry… we can break it down for you here.  Nexus is the connection a business has between itself and the state, which is commonly categorized into the following:

Nexus – Physical Connection:

A physical connection refers to when a business has some kind of physical presence in the state. This might be by having an office, a kiosk or a store, and even more uniquely, if you have inventory stored, or remote workers located in the state.

Nexus – Economic Connection:

You might also have nexus through your economic status within the state. This is especially important for eCommerce, as online shoppers are commonly in many different states. Nexus will be created if the state’s threshold or the number of transactions has been exceeded, creating an obligation for your business to pay sales tax.

How Do I Register For Sales Tax?

As mentioned above, be sure first to know which states you are obligated to pay sales to, and if you’re unsure, it’s recommended to seek advice from a sales tax expert to avoid hefty fines. If you’re ready to apply, you’ll need to do the following:

Gather Relevant Information and Documents:

Each state will have different requirements, however, you will commonly need your business licence and employee identification number (EIN).

Find The Correct State Registration Website:

Be sure to find the correct online website for the state/s you’re looking to apply to, and then double check you have all of the documents needed.

Apply:

All states have an online application process, and a handful offers a paper application process too. 

To make your life easier, we’ve linked each state to their relevant government registration page and written the registration fee next to each, so that you can register your business for sales tax faster and easier.


Alabama ($0), Arizona ($12), Arkansas ($50), California ($0), Colorado ($4-$16 + deposit), Connecticut ($100), Florida ($5), Georgia ($0), Hawaii ($20), Idaho ($0), Illinois ($0), Indiana ($25), Iowa ($0), Kansas ($0), Kentucky ($0), Louisiana ($0), Maine ($0), Maryland ($0), Massachusetts ($0), Michigan ($0), Minnesota ($0), Mississippi ($0), Missouri (bond required), Nebraska ($0), Nevada ($15), New Jersey ($0), New Mexico ($0), New York ($0), North Carolina ($0), North Dakota ($0), Ohio ($25 in state or free out-of-state), Oklahoma ($20), Pennsylvania ($0), Rhode Island ($10), South Carolina ($50), South Dakota ($0), Tennessee ($0), Texas ($0), Utah ($0), Vermont ($0), Virginia ($0), Washington ($0), West Virginia ($30), Wisconsin ($20), Wyoming ($60)