To get a resale permit, register with the tax agency of each state where your business has a sales tax obligation, usually through the state’s online portal. You’ll provide your business details, tax ID, and owner information, and in return you’ll receive a permit number that authorizes you to collect sales tax from customers and buy inventory from suppliers tax-free. Most states approve applications within a few days, and many charge nothing to register.
The rest depends on where you sell, what you sell, and how many states you sell into. Here’s what to check before you apply, how to file, and what the permit obligates you to do once it’s in hand.
Do You Actually Need One?
If you sell tangible goods or taxable services to end customers, you need a resale permit in the state where you operate. That covers storefronts, online shops, farmers market booths, and seasonal pop-ups. Wholesalers need one too, because the permit is what lets them buy stock tax-free from their own suppliers.
Five states have no statewide sales tax and don’t issue standard resale permits: Alaska, Delaware, Montana, New Hampshire, and Oregon. Some Alaska municipalities impose a local sales tax, so check with your city or borough if you’re operating there.
Selling Online Into Other States
Physical presence isn’t the only trigger. Since the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to collect sales tax once they cross an economic activity threshold.1Supreme Court of the United States. South Dakota v. Wayfair, Inc. (No. 17-494) The most common threshold is $100,000 in annual sales into the state, used by roughly 40 of the 45 states with a sales tax. Some states add a transaction count alternative, such as 200 or more separate sales. Cross either line and you must register in that state and start collecting tax.
Short-Term and Seasonal Sales
A few weeks at a craft fair or a holiday market still requires a permit. Most states offer a temporary seller’s permit covering a limited window, often 90 days or less at a single location. If you already hold a permanent permit in that state, you typically register a sub-permit for each temporary location rather than filing a separate application.
What to Have Ready Before You Apply
Every state’s form asks for roughly the same core information. Gathering it upfront is the difference between a same-day approval and an application that stalls for a week.
- Legal business name, any DBA, and your physical and mailing addresses
- Federal Employer Identification Number (EIN), or your Social Security Number if you’re a sole proprietor with no employees
- Entity type: sole proprietorship, partnership, LLC, or corporation
- Names, addresses, and Social Security Numbers for all owners, partners, or corporate officers
- A description of what you sell and how you sell it; some states ask for a NAICS code
- The date you plan to begin making taxable sales
Missing a single field, especially an officer’s SSN, is the most common reason applications get held up.
Submitting the Application
Nearly every state with a sales tax offers online registration through its department of revenue website, and online is almost always the fastest route. A few states also accept paper applications by mail or in person, but those take weeks rather than days.
The typical process: create an account on the state tax portal, fill out the application, upload any supporting documents, review, and submit. Some states approve instantly. Others take a few business days to verify what you submitted.
Fees and Deposits
Registration is free in many states, but not all. Some charge a one-time application fee. A handful require a security deposit or surety bond, especially if you or a listed owner has a history of late tax payments. Deposits range from modest amounts to several hundred dollars depending on the state and your tax history, and they’re often refunded once you’ve built a record of timely filings. Budget anywhere from $0 to a few hundred dollars, and check your state’s specific requirements before you start.
After Approval
You’ll receive your permit number along with instructions for displaying it. Many states require you to post the permit in a visible location at your place of business. Online-only sellers may need to keep the permit number accessible for customers or suppliers who ask. Your approval notice will also include your assigned filing frequency and instructions for using the state’s online filing system.
Registering in More Than One State
If you sell into multiple states, you need a permit in each one where you have a tax obligation. Registering individually in a dozen states is tedious, which is what the Streamlined Sales Tax Registration System (SSTRS) was built to fix.
The Streamlined Sales Tax Governing Board runs a free portal that lets you register in all 24 participating member states at once, or select only the ones you need.2Streamlined Sales Tax Governing Board. Sales Tax Registration SSTRS SSTRS registration itself is free, though individual states may still charge their own fees where you’re legally required to register.3Streamlined Sales Tax Governing Board. State Detail Large markets like California, Texas, New York, and Florida aren’t in the Streamlined system, so you’ll register directly through each of those state agencies.
Permit vs. Certificate: Not the Same Thing
These terms get mixed up constantly. A resale permit is the license your state issues that authorizes you to collect and remit sales tax. A resale certificate is a form you hand to a supplier when buying goods for resale, telling them not to charge you sales tax on that purchase. You can’t issue a valid resale certificate without first holding a resale permit, because the certificate requires your permit number.
Using a resale certificate to buy something for personal use, and then keeping or consuming the item yourself, means you owe use tax on its cost. This is a frequent audit trigger.
What You’re On the Hook For After Approval
Getting the permit is the easy part.
Collecting and Filing on Schedule
You must charge the correct sales tax rate on every taxable sale and remit what you collect on the schedule the state assigns you: monthly, quarterly, or annually, based on volume. File by the deadline even in periods when you had zero sales. Skipping a return because you owe nothing generates unnecessary penalties.
Records
Keep detailed records of every sale, the tax collected on each transaction, and any tax-exempt sales supported by a buyer’s resale certificate. Most states require you to keep these records for at least three to four years after filing the related return. If a state audits you and you can’t produce documentation for an exemption you allowed, you’ll owe the tax yourself, plus interest.
Use Tax on Inventory You Pull for Yourself
When you buy inventory tax-free with your resale certificate and then use items internally, you owe use tax on their cost. The office supply retailer who prints invoices on stock paper, the coffee shop whose staff drink from customer cups, the clothing store owner who takes home a jacket: all of them owe use tax at the same rate as sales tax, reported on the regular sales tax return. Auditors compare the volume of tax-free purchases against reported taxable sales, and a gap is the first thing they look for.
Penalties
Operating without a permit when you need one exposes you to back taxes on every sale you should have collected on, plus interest and late-filing penalties. Late-filing penalties commonly run from 5% to 25% of the tax owed, and many states impose minimum flat fees even on small balances. Interest compounds on both the unpaid tax and the penalty, so the cost climbs the longer you wait. Deliberate misuse of a resale certificate is treated more seriously and can carry fraud penalties on top of the unpaid tax.
Closing or Updating the Permit
If you sell the business, change its legal structure, or shut down, formally close or update your sales tax account in each state where you hold a permit. Simply stopping sales doesn’t cancel your filing obligation. Until the state processes your closure, it will keep expecting returns, and missing them generates penalties.
Most states let you close through the same portal where you file. File a final return covering any remaining sales through your last day of business, remit any tax still owed, and provide the effective closure date. Some states process closures within 48 hours; others take longer. If you’re selling the business rather than closing it, the buyer typically needs to apply for a new permit of their own. Outstanding tax liabilities stay with you as the original permit holder unless the state agrees otherwise, and some states hold buyers liable for a seller’s unpaid taxes if proper clearance procedures aren’t followed.
Smaller changes, like adding a location, changing your business name, or updating officer information, also require prompt notification. Keeping your registration current avoids delays if you ever need to respond to an audit or resolve a dispute.