Sales tax glossary
What does a sales tax permit do?
A sales tax permit is a state registration that authorizes a business to collect sales tax from customers. States also call it a seller's permit, sales tax license or certificate of authority. A business generally needs one before collecting tax in a state, and the state assigns it a filing schedule.
Full guide: What is a sales tax permit?
Example
A seller that crosses a state's economic nexus threshold applies online with that state's tax agency. Once approved, it receives a permit number, starts charging tax, and files returns on the assigned schedule.
Why it matters for sellers
Many states prohibit collecting sales tax without a permit, and selling without one after you have nexus builds liability. Registering also starts your filing obligations, including returns for periods with no sales.
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Related terms
This definition is general information, not tax or legal advice. Rules vary by jurisdiction and change over time.
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