How Do I Register to Collect Sales Tax in My State?
Getting a Seller's Permit in Your State
Do I Have to Deal with Sales Tax in My Business?
Sales taxes are imposed on most products and many services sold by businesses. Sales taxes vary by state, in terms of
- Types of products subject to sales tax,
- Types of services subject to sales tax, and
- Whether sales tax is imposed on online transactions.
As you start your business and add products and services, you will need to check with your state's department of revenue or taxing authority to determine whether your business must handle sales taxes. While the specific requirements vary by state, this article will give you the basics you need in order to complete the registration.
Seller's Permits for Every State - And Online
If you are doing business in more than one state and selling in different states, you will need a sales tax permit for every state (unless the state doesn't have sales tax).
The sales tax system for online sales is changing, and in the future, you may need to register to collect sales tax in multiple states.
Before You Apply for a Seller's Permit
When you have determined that your products or services are subject to sales taxes, there are some things you will need to do in order to get a seller's permit to sell these taxable products and services in your state.
Business Tax ID Numbers. You will need to get a tax ID number for your business. It's called an Employer ID (EIN), but you'll need it even if you don't have employees. The EIN is a federal tax number like a Social Security number. You can apply for and get an EIN online. You may also need to get a state EIN, depending on your state.
NAICS Code. The U.S. government classified businesses by the types of products or services they provide. You will need to show the NAICS code for all of the different types of taxable products and services you produce.
Information about Your Business. You will need to include your business legal type, and possibly the date your business was started. You will also need to include information about your business bank account.
Getting a Seller's Permit
Most states allow you to file your application for a seller's permit (or other sales tax registration) and pay online. Go to the website of your State Department of Revenue (or other designation) to find the online link.
Here are some common questions you will be asked and information you will need to provide to complete the sales tax registration in your state, in addition to the information above.
- Your business name and any previous business entity, if you bought your business from someone else
- Calendar quarters your business operates if your business is seasonal
- The starting date for collecting sales tax in your state
- The type of products or services to be sold (or the NAICS Codes, as noted above)
- The amount of sales tax you estimate you will collect (your filing frequency is based on this amount)
- If you have more than one location, whether you will be filing consolidated returns
You may also be required to submit documents for verification purposes:
- Your social security number (corporate officers excluded)
- A photocopy of your driver license
- The name and location of a bank where you have an account
- Names of suppliers
- Name of the person maintaining your account
- Names and address of a personal reference.
Some states charge a fee for seller's registration; others do not. The questions above appear to be common; your state may ask additional questions.
Each state has different requirements.
After You Have Registered to Collect Sales Taxes
After you have registered, you will need to set up accounting procedures to collect the sales taxes on transactions, including online transactions, if applicable. Then you will need to make sure you set up the periodic reports and payments for sales taxes.
You can read more about how to collect, report, and pay sales taxes, remembering that the process will be slightly different for each state.