To get a vendor’s license, register your business with your state’s tax authority — usually the department of revenue or taxation — through its online portal, submit your business information and owner details, and pay the state’s fee if there is one. In most states the application is free or under $100, and many online applications are approved within a few business days. The license authorizes you to collect sales tax from customers, and you generally need it before your first taxable sale.
What a Vendor’s License Is
A vendor’s license goes by several names depending on where you live: sales tax permit, seller’s permit, retail license, or vendor’s license. The function is the same. It registers your business with the state tax authority and authorizes you to collect sales tax on taxable transactions. Collecting sales tax without one is illegal in most jurisdictions, and failing to collect when you were required to can trigger back taxes, penalties, and interest.
It is not the same thing as registering your business as a legal entity. Forming an LLC, corporation, or sole proprietorship establishes that the business exists. A vendor’s license is a separate step, handled by a different agency, that specifically authorizes sales tax collection. Most sellers need both.
Do You Need One
If your business sells tangible goods to customers, you almost certainly need a vendor’s license in the state where you operate. The same applies if you sell taxable services, though which services are taxable varies widely. Some states tax only a narrow list, such as equipment repair or interior decorating. Others cast a wider net.
A few situations change the answer:
- Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. If you operate exclusively in one of these, no state-level license is required. Alaska is the outlier because some local jurisdictions there impose their own sales taxes.
- In many states, professional services like legal advice, accounting, medical care, and consulting aren’t subject to sales tax. If everything you sell is genuinely exempt, you probably don’t need a permit. Check your state’s taxable services list before assuming so, because the boundaries can be surprising.
- If every sale flows through a marketplace facilitator such as Amazon, Etsy, or eBay, the platform handles sales tax collection in nearly every state that imposes it. You may still need to register in your home state, and some states require you to file zero-dollar returns even when the marketplace does all the collecting.
What to Gather Before You Apply
Pull this together before you start. An application that stalls halfway is worse than one you delay by a day.
- Your business legal name and any DBAs or trade names you use.
- Your Federal Employer Identification Number (EIN). Most business structures need one, and you can get an EIN free from the IRS. Applying online issues the number immediately. Sole proprietors without an EIN can typically use their Social Security Number.
- Your business structure: sole proprietorship, LLC, partnership, or corporation.
- Owner information: names, addresses, and Social Security Numbers or ITINs for all owners or officers.
- Your business address, plus any additional locations where you’ll sell.
- A description of what you plan to sell and an estimate of your monthly or annual sales volume. States use this estimate to set your initial filing frequency.
Supporting documents usually include your articles of organization or incorporation paperwork and a copy of your EIN confirmation letter.
How to Submit the Application
Application forms live on the website of your state’s department of revenue or taxation. Most states let you apply online, and that’s almost always the fastest route. Some also accept paper applications by mail or in person at a local tax office, but these take longer and offer fewer safeguards against errors.
In practice, you create an account on the state’s tax portal, complete the application, and submit it electronically. Many states process online applications within a few business days, and some issue your permit number the same day. Paper applications generally take longer.
If you sell into several states and want to consolidate the paperwork, the Streamlined Sales Tax Registration System lets you register in all participating member states through a single free application.
What It Costs
Registering for a sales tax permit is free in the majority of states. Among the states that do charge, fees run from as low as $5 to around $100, with a few outliers above that. Some states also require a security deposit if your estimated sales exceed a certain threshold. Check your state’s department of revenue website for the exact fee before assuming you’ll owe anything.
How Long It Takes
Processing runs from same-day for online applications in some states to about two weeks elsewhere. Save your confirmation email, tracking number, or receipt. If the state needs additional information, they’ll contact you, and that confirmation helps you follow up.
If you need to start selling before your permit arrives, keep a copy of your submitted application as proof that you’ve applied, and begin collecting the correct sales tax from customers so you’re ready to remit once the permit is issued.
Selling Into Other States
If you sell online to customers in other states, those states’ sales tax rules apply to you too. The Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc. established that states can require out-of-state sellers to collect sales tax without a physical presence, as long as the seller crosses certain economic thresholds.
The most common threshold is $100,000 in sales into a state within a calendar year. Some states also trigger registration at 200 or more separate transactions, though that transaction-count test is disappearing; more than a dozen states have dropped it in recent years. The safer approach is to monitor sales into each state and register once you approach the $100,000 mark.
After You Have the License
Getting the license is only the first step. Ongoing compliance is where most small businesses stumble.
Displaying It
Most states require you to display your vendor’s license or sales tax permit at your place of business where customers and inspectors can see it. If you operate online without a storefront, check whether your state has specific rules about making your permit number available on your website.
Filing and Remitting
The state will assign a filing frequency based on your sales volume. New businesses with modest projected sales often start on a quarterly or annual schedule; higher-volume sellers file monthly. As your actual sales history develops, the state may adjust your frequency. In periods when you make no sales, most states still require a zero-dollar return. Skipping a filing period because nothing happened is one of the fastest ways to trigger penalties.
Renewals
Some states issue permits that don’t expire. Others require annual or biennial renewal with updated information and a fee. Missing a renewal can lapse your license, which means you’re technically collecting sales tax without authorization until you fix it.
Records
Keep detailed records of every taxable sale, every exemption certificate you accepted, and every return you filed. Most states require retention for at least three to four years from the filing date, though some mandate six or seven. If you never filed a required return, the statute of limitations may never start running in some states. Four years is a safe floor; longer if your state demands it.
Buying Inventory Tax-Free
Once you have a valid permit, you can present a resale certificate to your suppliers instead of paying sales tax on goods you intend to resell. The tax gets collected later, when you sell the item to the end customer. The form varies by state, and many states accept the Multistate Tax Commission’s Uniform Sales and Use Tax Resale Certificate. Using a resale certificate to buy personal items tax-free can trigger fines, revocation of the certificate privilege, and in some cases criminal penalties.
Extra Permits for Food and Mobile Vendors
If you sell food or operate from a cart, truck, or temporary setup, the sales tax permit is only your starting point. Food vendors typically need a health department permit, which requires passing an inspection of your preparation and serving setup. Many jurisdictions also require at least one person on-site to hold a food safety manager certification and, in some areas, allergen awareness training. Food trucks and mobile carts often need a permit from their base jurisdiction plus proof of a commissary, meaning a licensed commercial kitchen where you prep food and clean equipment.
Mobile vendors selling non-food items often need a separate peddler’s or transient merchant license from each municipality where they set up. These permits may restrict where and when you can sell, and some cities cap the number they issue. Apply well in advance; waitlists are common in popular locations.