A sales tax number is a state-issued identification code that authorizes your business to collect sales tax from customers on that state’s behalf and remit it to the state. You need one in any state where your business has a physical presence or where your sales volume crosses the state’s economic nexus threshold, which most commonly sits at $100,000 in annual sales into that state. You get it by registering with the state’s department of revenue, usually online, usually free.
What the Number Actually Is
A sales tax number is a state-level credential, separate from your federal EIN. The IRS doesn’t issue it and doesn’t care about it. The state issues it, assigns you an account tied to it, and uses it to track what you collect from buyers and what you send in.
States use different labels for the same thing. Depending on where you register, you’ll see it called a seller’s permit, sales tax license, sales tax certificate, resale number, or state tax ID. The authorization behind the label is identical: the state has acknowledged your business and expects you to start collecting tax on taxable sales.
One point worth internalizing before you go any further. The sales tax you charge customers is not your money. States treat it as trust fund revenue, meaning it belongs to the state from the moment you collect it. That framing changes what happens later if things go wrong, and it’s why the penalties for mishandling sales tax are harsher than for ordinary business debt.
Who Needs a Sales Tax Number
You need one in any state where your business has established nexus, which is the legal connection between your business and that state that triggers a tax obligation. Nexus comes in two forms.
Physical Nexus
Physical nexus exists when your business has a tangible footprint in a state: an office, a warehouse, a retail store, an employee working remotely from home there, or inventory sitting in a third-party fulfillment center. Any of these creates an obligation to register, regardless of how much you sell there. Even a single remote employee is enough.
Economic Nexus
Economic nexus applies when you hit a sales threshold in a state without having any physical presence there. The Supreme Court authorized this in 2018 in South Dakota v. Wayfair, holding that states could require remote sellers to collect sales tax based on their in-state sales volume alone.1Supreme Court of the United States. South Dakota v. Wayfair Inc., 585 U.S. (2018) Nearly every state with a sales tax has since adopted its own economic nexus standard.2Congressional Research Service. State Sales Tax Nexus After South Dakota v. Wayfair
The most common threshold is $100,000 in gross sales into a state. Some states pair that with a 200-transaction alternative, where hitting either the dollar amount or the transaction count triggers the obligation. The trend is away from the transaction test. As of 2026, roughly 18 jurisdictions still include one. If you sell high volumes of low-priced items, check each state’s specific rules, because a transaction-based trigger can catch you well before your revenue does.
Once you cross the threshold, you’re required to register before you make additional taxable sales in that state. Waiting to see whether anyone notices does not work in your favor.
States With No Sales Tax
Five states impose no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. You don’t need a sales tax number for general retail sales in these states. Alaska is a partial exception: while it has no state-level tax, some Alaska municipalities impose their own local sales taxes, so businesses operating in those localities may still need to register locally.
If You Only Sell Through a Marketplace
Platforms like Amazon, Etsy, and Walmart Marketplace are usually already collecting and remitting sales tax on your behalf. Nearly every state with a sales tax has passed marketplace facilitator laws requiring the platform to handle collection on facilitated sales once the platform meets the state’s thresholds.3Streamlined Sales Tax. Marketplace Facilitator
That doesn’t fully release you from the system. You’re still responsible for tax on sales made outside the platform, whether through your own website, at trade shows, or in a physical store. Some states also require marketplace sellers to register and file returns reporting all in-state sales, even when the marketplace collected the tax. Check registration rules in each state where you sell in real volume, regardless of who is handling the money.
How to Apply
You register through the state’s department of revenue, tax commission, or equivalent agency. Most states have an online portal, and the application moves quickly if you have your documents ready. You’ll typically be asked for:
- Your federal EIN. Sole proprietors without an EIN may be able to use their Social Security Number.
- Business details: legal name, trade name if different, physical and mailing addresses, and entity type.
- Owner information: names and Social Security Numbers for owners, partners, or corporate officers.
- Projected annual taxable sales in the state, which the agency uses to set your filing frequency.
- The date you began or plan to begin making taxable sales in the state.
Processing times vary. Online applications are often approved within one to two business days. Paper applications can take four to six weeks. You aren’t supposed to collect sales tax until the state has actually issued your number, so build that lead time into any launch plan.
Fees and Deposits
Most states charge nothing for a basic sales tax permit. Where fees exist, they usually run between $10 and $50, though at least one state charges up to $100. A handful of states may also require a refundable security deposit or surety bond, particularly for new businesses or remote sellers with no prior tax history. Deposits can range from $50 to several thousand dollars depending on the state and your estimated liability, and they’re usually refunded once you establish a reliable filing record.
Registering in Several States at Once
If you owe registrations in a lot of states, the Streamlined Sales Tax Registration System (SSTRS) lets you register in multiple participating states through a single application. Currently, 23 states are full members of the Streamlined Sales and Use Tax Agreement.4Streamlined Sales Tax. State Detail You pick which member states you want, manage them from one account, and can cancel individual registrations if needed.5Streamlined Sales Tax. Registration FAQ
Remote sellers meeting economic nexus thresholds can also use a Certified Service Provider (CSP) through the SST program. A CSP handles tax calculation, return preparation, and filing at no cost to the seller in states where the seller qualifies, because the states compensate the CSP directly.6Streamlined Sales Tax. FAQs – About Certified Service Providers For a business suddenly facing obligations across a dozen states, that free service is often worth more than any registration fee you’d have saved elsewhere.
What the Number Lets You Do Besides Collect
Your sales tax number has a second use. It lets you buy inventory without paying sales tax on the purchase. When you buy goods specifically for resale, you give your supplier a resale certificate that includes your sales tax number. The certificate tells the supplier the transaction is exempt because you’ll collect the tax from the end customer instead.
This applies only to items you genuinely intend to resell. Using a resale certificate to buy office furniture, personal-use items, or anything your business will consume rather than sell is tax fraud. States audit resale certificate usage, and abuse exposes you to back taxes, penalties, and interest on every improper purchase.
When someone hands you a resale certificate as a seller, verify it. Many states offer online lookup tools where you can confirm a buyer’s permit is active. Accepting an invalid certificate doesn’t protect you. If it turns out to be fraudulent or expired, you may owe the uncollected tax yourself.
What Happens If You Skip It
The consequences of ignoring sales tax obligations range from expensive to career-altering. States impose both penalties and interest on late or unfiled returns. A common structure is 5% of the unpaid tax per month the return is late, capped at 25%, with interest accruing separately on top. If the state finds fraud, the rates climb sharply.
The bigger risk comes from the trust-fund character of the money. Because sales tax belongs to the state from the moment of collection, failing to remit it is treated differently from ordinary unpaid business debt. Most states can pierce the corporate veil and hold individual officers, owners, or managers personally liable for unremitted sales tax. That personal liability survives bankruptcy. This is where owners are most often blindsided: they assumed the LLC or corporation would shield them. It doesn’t, not for collected-but-unremitted sales tax.
Voluntary Disclosure Agreements
If you realize you should have been registered somewhere but weren’t, a voluntary disclosure agreement (VDA) is usually the best way out. Under a VDA, you approach the state first, and in exchange for coming forward, the state typically waives penalties and limits the lookback to three or four years of back taxes plus interest, rather than the full period of noncompliance.7Multistate Tax Commission. Lookback Periods for States Participating in National Nexus Program
The timing matters. You generally cannot enter a VDA once the state has already contacted you about an audit or flagged you as noncompliant. The window closes the moment the state starts looking. If you’ve been selling into states without collecting, addressing it proactively is almost always cheaper than waiting to be found.