Sales Tax Registration Process in the US 

Introduction

Sales tax registration is a mandatory compliance requirement only when a business has sales tax nexus in a US state. Since the United States follows a state-based tax system, businesses must register for sales tax in each state where they are legally required to collect tax. The obligation depends on factors such as physical presence, sales volume, and customer location. Understanding sales tax registration helps businesses avoid penalties, audits, and compliance issues.

What Is Sales Tax Registration?

Sales tax registration is the process of registering a business with a state’s Department of Revenue or tax authority to legally collect and remit sales tax. After successful registration, the state issues a sales tax permit or sales tax ID number. This permit authorizes the business to charge sales tax on taxable transactions in that state. There is no federal sales tax in the United States. Each state independently governs its registration procedures, tax rates, filing frequency, and enforcement rules.

Since there is no federal sales tax in the United States, businesses that have already completed their LLC registration in the USA must still evaluate sales tax obligations separately at the state level.

Why Does Sales Tax Registration Matter?

Once a business crosses the sales tax nexus threshold in a state, registration becomes a legal requirement. State tax authorities may impose penalties, interest, and backdated tax liability for late registration. Many businesses align sales tax registration with broader US business compliance essentials to avoid regulatory gaps and audit exposure.

Sales tax registration matters because it:

• Allows lawful collection of sales tax.
• Prevents backdated tax assessments.
• Reduces audit and compliance risk.
• Supports compliance with marketplace requirements.
• Ensures adherence to state tax laws.

When Do You Need to Register for Sales Tax?

A business must register for sales tax before collecting tax in any state where it has sales tax nexus.

Common Nexus Triggers

Physical Nexus

• A business may have a physical nexus if it has:
• An office or warehouse
• Employees or independent contractors

Inventory stored in the state, including Amazon FBA inventory.

Economic Nexus

Economic nexus applies when a business exceeds state-specific sales thresholds, even without physical presence.

As established by the US Supreme Court in South Dakota v. Wayfair, states may enforce economic nexus rules without requiring physical presence.

Note: Economic nexus thresholds vary by state and are subject to change.

How to Register for Sales Tax in the US?

Sales tax registration is completed separately for each state where nexus exists.

Step-by-Step Registration Process

Sales tax registration must be completed separately for each state where nexus exists.

Step 1: Identify Nexus States

Review where your business has physical or economic nexus.

Step 2: Gather Required Information

Most states require:

• Legal business name and address
• Federal Employer Identification Number (EIN)
• Business formation date
• NAICS code
• Owner or officer details
• Date of first taxable sale in the state
• Estimated taxable sales

Step 3: Submit State Application

Registration is typically completed online through the state’s Department of Revenue portal. Online filings are generally processed faster than paper submissions.

Step 4: Receive Sales Tax Permit

Processing time varies by state. Some states issue permits immediately, while others may take several business days.

Ongoing Compliance After Sales Tax Registration

After registration, businesses must comply with ongoing state requirements.

You must:

• Collect the correct sales tax rates
• File returns monthly, quarterly, or annually as assigned
• File zero returns if required
• Remit collected taxes on time
• Maintain sales tax records as required by state law

Late filings and payments generally attract interest and penalties under state tax regulations.

How Does Ebizfiling Help with Sales Tax Registration?

At Ebizfiling, we help businesses manage sales tax registration in the US with clarity and accuracy. We begin by evaluating your business activities to determine where a sales tax nexus exists and identify the states where registration is legally required. Our team prepares and submits state-specific sales tax registration applications, ensuring that all information is accurate and compliant with local tax authority requirements.

For businesses operating in multiple states, we also assist with registration under the Streamlined Sales Tax system wherever applicable. Beyond registration, we support businesses with ongoing sales tax compliance, including guidance on filings and reporting, so that registrations remain active and error-free.

Our goal is to ensure your business stays compliant without delays, penalties, or operational disruptions.

Conclusion

Sales tax registration in the US is a critical compliance step for businesses with sales tax nexus. Timely and accurate registration helps prevent penalties, interest, and audit exposure. Because state rules and thresholds vary, professional guidance ensures proper registration and ongoing compliance. Sales tax registration forms the foundation for lawful tax collection and long-term compliance.

FAQs on Sales Tax Registration