Step-by-Step Process: How to Get a Seller’s Permit in the U.S.

When starting or expanding your business, you must obtain the necessary licenses and permits. They protect you from legal issues and allow you to perform your business activities faultlessly. Among various licenses, a seller’s permit is essential for any business operating in the US (except for the states with no sales tax). Whether conducting a brick-and-mortar business or an ecommerce company, you’ll need a seller’s permit. It can be complicated for new businesses to understand where to start. This article outlines a seller’s permit and the step-by-step process to obtain it.  

What is a Seller’s Permit?

A seller’s permit is also often called as a sales tax permit, retail license, sales tax license, vendor’s license, use tax permit, or certificate of authority. Every business, whether ecommerce or onsite, must obtain this to conduct business in a state. It is a document that authorizes permission to collect sales tax on taxable goods and services from customers on behalf of the state. After getting a sales tax license, a business becomes an intermediary between the customer and the government for sales tax collection. The customers pay sales tax to the business and each taxable item’s sales price. The registered seller collects and remits the sales tax to the state’s taxing authority.

How to get a Seller’s Permit?

Getting a seller’s permit is simple, but the process may vary among different states. The cost of a seller’s permit also varies. Most states don’t charge any fees for the license. Still, some states require a registration fee, security deposit, and renewal charges. You can find the seller’s permit application on the website of the Department of Revenue of each state. For instance, the applications in Florida and California are available on the respective states’ websites.

Steps

• Fill out an application,
• Complete the documentation and pay the required fees (if any), and
• Submit the application.

Documents Needed

The following documents are usually required for sales tax permit registration. However, depending on your business entity and the nature of your business, the requirements may vary.

• Name and location of your business
• Social Security Number (SSN) or Employer Identification Number (EIN)
• Business entity structure
• Expected monthly sales
• Contact information and form of identification
• Bank account information
• Vendors’ information

States Guide

If your business has a physical or economic nexus in any U.S. state, click on the corresponding state below for a detailed guide on how to obtain a seller’s permit there. Each guide includes step-by-step instructions, application links, and important local requirements to help you stay compliant. Alabama Sellers Use Tax | Arizona TPT License | Arkansas Sales Tax Permit | California Seller’s Permit | Colorado Sales Tax License | Connecticut Sales and Use Tax Permit | D.C. Business License | Florida Sales and Use Tax Permit | Georgia Seller’s Permit | Hawaii GET License | Idaho Seller’s Permit | Illinois Seller’s Permit | Indiana Retail Merchant Certificate | Iowa Sales and Use Tax Permit | Kansas Retailers’ Compensating Use Tax Registration Certificate | Kentucky Sales and Use Tax Permit | Louisiana Direct Marketer Permit | Maine Sales and Use Tax Permit | Maryland Sales and Use Tax License | Massachusetts Sales and Use Tax Permit | Michigan Sales Tax License | Minnesota Sales Tax Permit | Mississippi Sales and Use Tax Permit | Missouri Seller’s Permit | Nebraska Sales Tax Permit | Nevada Certificate of Authority | New Jersey Certificate of Authority | New Mexico Gross Receipt Tax Permit | New York Certificate of Authority | North Carolina Sales and Use Tax Permit | North Dakota Sales and Use Tax Permit | Ohio Vendor’s License | Oklahoma Sales or Use Tax Permit | Pennsylvania Sales, Use, and Hotel Occupancy Retail Tax License | Rhode Island Sales and Use Tax Permit | South Carolina Retail License | South Dakota Sales Tax License | Tennessee Sales Tax Permit | Texas Seller’s Permit | Utah Sales and Use Tax License | Vermont Sales and Use Tax License | Virginia Retail Sales and Use Tax Permit | Washington Business License | West Virginia Sales and Use Tax Permit | Wisconsin Seller’s Permit | Wyoming Sales/Use Tax License.  

Cost of a Seller’s Permit

Out of 45 states that impose state or local sales tax, only 15 states charge a fee for issuing a sales tax permit. The fee ranges between $5 and $60. Florida charges the lowest cost ($5) with no requirement for a security deposit. Wyoming charges the highest cost ($60) and does not require sellers to renew the license. In Ohio, only in-state sellers have to pay the application fee, and out-of-state sellers can get it for free.

Find the cost of a sales tax permit in each state before filling out the application. Remember that the cost can also depend on the mode of application. For instance, Florida offers free online sales tax license registration but charges a $5 application fee for mail-in applications.

Renewal of Seller’s Permit

Some states require sellers to renew their permits, while others issue permits without an expiration date. The renewal requirements also vary among states that charge sales tax. The following states are examples of a few states that do not have a renewal requirement:

• Texas
• California
• Michigan
• Virginia

On the other hand, states like Colorado, Indiana, Louisiana, and Pennsylvania issue renewable seller’s permits. The permit’s validity period, renewal fees, and other requirements vary from state to state.

What is the Difference Between a Seller’s Permit and a Reseller Permit?

Although they sound similar, there is a difference between a seller’s permit and reseller permit and what they are used for. A reseller’s permit is a document issued by the state that allows sellers to buy products intended for resale without paying sales tax. It is also known as a reseller’s license, resale certificate, or wholesale certificate. It is used and accepted differently in every state.

When you sell items online, unless you manufacture the items yourself, you will likely need a reseller permit to give to vendors when purchasing raw materials, packaging, and products. A resale certificate can only be used to buy items you intend to resell or parts you intend to use directly in items you plan to resell. The resale certificate helps avoid double taxation of sales tax on products as the sales tax is collected from the end consumer.

Keeping it simple, resellers can purchase items tax-free for resale if sales tax is charged on those items when sold to the end customer.

Let TaxHero process your applications

Applying for a seller’s permit, fulfilling all the requirements, getting all the documentation done, and finally getting the permit are time-consuming and mundane. Let TaxHero take the burden off your shoulder so that you can focus on growing your business and focus more on value-added activities. Book a call today and let TaxHero handle all seller’s permit applications from all states.