To obtain a vendor’s license, register for a sales tax permit through the department of revenue in each state where you sell taxable goods or services. Most states let you apply online for free, issue a permit number quickly, and ask for the same core information: your business name, federal EIN or Social Security Number, entity type, owner details, business address, a description of what you sell, and an estimate of your sales.
What a Vendor’s License Actually Is
“Vendor’s license” is the common name for what different states call a seller’s permit, sales tax permit, or certificate of authority. It authorizes you to collect sales tax from customers and remit it to the state. Any business selling physical products or taxable services needs one in every state where it has a tax obligation.
Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. If you only sell in those states, you don’t need a state sales tax permit, though Alaska allows local jurisdictions to impose their own sales taxes.
A sales tax permit is separate from a general local business license. Many cities and counties require their own operating license before you open, and that’s a distinct filing with your city or county clerk. Certain industries add another layer: food vendors typically need health department permits, alcohol sellers need liquor licenses, and contractors face separate licensing boards. Start with your state’s department of revenue for the sales tax permit, then check local requirements.
When You Need a License in a State Where You Have No Location
If you sell online or ship across state lines, you may owe sales tax in states where you have no physical presence. In South Dakota v. Wayfair, the U.S. Supreme Court overruled the older rule that a state could only require collection from businesses physically present within its borders. States can now require you to collect based on your sales volume into the state.1Supreme Court of the United States. South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018)
Most states with a sales tax use an economic nexus threshold of $100,000 in annual sales. California and Texas set it at $500,000, and Alabama at $250,000. Some states also trigger registration if you exceed 200 separate transactions in a year, even if your dollar volume stays below the revenue threshold. Once you cross either line, you need a vendor’s license in that state and must start collecting tax.1Supreme Court of the United States. South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018)
Selling Through Marketplaces
If you sell through platforms like Amazon, Etsy, or Shopify, the platform itself collects and remits sales tax on your behalf in nearly every state with a sales tax. That doesn’t necessarily eliminate your need to register. In many states, sales made through a marketplace still count toward your economic nexus threshold, so you may still need your own permit for direct sales or for audit documentation.
Registering in Multiple States at Once
Registering individually in dozens of states is tedious. The Streamlined Sales Tax Registration System lets you register for free in 24 member states through a single online application.2Streamlined Sales Tax Governing Board. Sales Tax Registration SSTRS You still file returns and pay tax to each state separately, but the initial registration happens in one place. For states outside the agreement, you register through each state’s department of revenue.
Temporary Permits for Occasional Selling
If you only sell at occasional events like craft fairs, festivals, or trade shows, most states offer a temporary vendor’s license instead of a permanent one. These are typically valid for 30 days or a single event. The application is simpler, generally requiring your business name, tax ID number, event details, and contact information.
Once you participate in multiple events per year, most states require you to convert to a permanent license. Three or more events annually is a common trigger, though the exact threshold varies.
What to Gather Before You Apply
Sales tax permit applications are standardized enough that you can prepare one set of information and reuse it across states. Have the following ready:
- Business legal name and any trade names, matching your formation documents and federal tax records.
- Federal Employer Identification Number. Partnerships, corporations, and LLCs need an EIN; sole proprietors without employees can use their Social Security Number instead.3Internal Revenue Service. Get an Employer Identification Number
- Business structure: sole proprietorship, partnership, LLC, or corporation.
- Names, addresses, and Social Security Numbers of all owners or responsible parties.
- Physical location and mailing address, including any warehouse or storage locations.
- A description of the products or services you plan to sell.
- Estimated monthly or annual revenue. Be realistic; wildly inflated estimates can trigger bond requirements in some states.
- Business start date.
If you’re forming a new entity, the order matters. Complete your state business formation first, then apply for your EIN, and register for the sales tax permit last. The IRS advises forming your entity with the state before applying for an EIN, because doing it in the wrong order can delay the process.3Internal Revenue Service. Get an Employer Identification Number
When a Bond May Be Required
Some states require new applicants to post a surety bond before issuing a permit, particularly in high-risk industries like alcohol, tobacco, or fuel. States may also require a bond from businesses with a history of tax delinquency or from itinerant vendors with no fixed location. Bond amounts vary based on your estimated tax liability. Most applicants won’t encounter this, but if your application triggers it, you’ll need to provide a bond through a licensed surety company before the permit is approved.
Submitting the Application
Most states offer online registration through their department of revenue website, and it’s almost always the fastest option. You create an account, enter your business information, upload any required documents, and submit. Some states issue your permit number immediately. Others mail a physical certificate within one to six weeks.
Mail and in-person options exist in most states for those who prefer them, but processing takes longer. Mail applications go to the address on the form with any required payment. In-person registration means visiting a state revenue office with your documents.
Registration is free in most states. Around a dozen states charge fees. Florida charges $5 for paper applications, Colorado $63, South Carolina $50, Washington $90, and Connecticut $100. A few others fall in the $10 to $30 range. Check your specific state’s revenue department before assuming there’s a fee.
After You Have the License
The permit itself is the easy part. Staying compliant takes sustained attention.
Using Resale Certificates
Once you have a vendor’s license, you can issue resale certificates to your suppliers to purchase inventory without paying sales tax on those purchases. The logic is that you’ll collect sales tax when you resell the item to your end customer, so taxing it twice would be double taxation. Your resale certificate includes your permit number and a statement that the goods are being purchased for resale.
Resale certificates only cover items you genuinely intend to resell. You cannot use one to buy office furniture, cleaning supplies, or equipment for your own business. If you buy something on a resale certificate and use it yourself, you owe use tax on that item directly to the state. States audit this, and misuse is one of the fastest ways to draw enforcement attention.
Most resale certificates are issued as blanket certificates covering all future purchases from a particular supplier, so you don’t fill one out for every transaction. A valid certificate typically needs your business name and address, the seller’s name and address, your sales tax registration number, a description of what you’re purchasing, and your signature.
Collecting, Filing, and Remitting
You must charge the correct sales tax rate on every taxable transaction and remit those funds to the state on schedule. Your filing frequency depends on volume: high-volume businesses typically file monthly, mid-range businesses quarterly, and smaller sellers annually. The state assigns your frequency when it issues your permit and may adjust it as your sales change. A common due date is the 20th of the month following the reporting period, but this varies.
One detail catches new vendors off guard: you must file a return even in periods when you had zero sales. Skipping a filing because you had nothing to report triggers the same penalties as a late filing with tax due.
Records
Keep detailed records of every sale, the tax collected, and every remittance you make. Retain sales receipts, invoices, exemption certificates received from customers, and copies of filed returns. Most states require you to keep these for at least three years, though seven is safer, since some states require longer retention and audits can reach further back. Exemption certificates and filed returns are worth keeping permanently.
Renewals and Updates
Some states issue permanent permits that never expire; others require annual or biennial renewal. Missing a renewal deadline invalidates the license, which means you’re technically operating without one until it’s reinstated. Set calendar reminders ahead of any renewal date your state imposes.
You also have to update the licensing authority whenever your business information changes: a new address, a change in ownership, a different business name, or a shift in entity structure. Most states expect notification within 30 to 60 days of the change.
What Happens If You Don’t Register or Don’t Cancel
Operating without a required vendor’s license exposes you to back taxes on every sale you should have been collecting on, plus interest and penalties. Late-filing penalties range from small percentages of the tax due to amounts that escalate monthly, and some states impose penalties that can equal the full amount of the unpaid tax. Many states can pursue criminal charges for willfully failing to collect or remit, and collecting tax from customers and then failing to remit it is treated particularly harshly.
The opposite problem shows up when you stop selling. When you close the business, sell it, or simply stop making taxable sales, formally cancel your vendor’s license with the state. An open permit tells the state you’re still expected to file returns. If you stop filing without canceling, the state starts generating estimated assessments of what it thinks you owe, along with penalties and interest for each missed filing. These can accumulate for months or years before you notice, and they will surface if you ever try to register a new business in that state.
To cancel properly, contact your state’s department of revenue, submit the required cancellation form, and file a final return covering your last period of activity. Most states expect cancellation within 30 days of ceasing operations. Keep your sales records afterward; you’re still subject to audit for prior periods.