Sales tax layer
What is a seller's permit and who needs one?
A seller's permit, also called a sales tax permit or sales tax license, is a state registration that authorizes a business to collect sales tax from customers and remit it to the state, and it is required for nearly any business selling taxable goods, and in many states taxable services, to buyers in that state.
What is a seller's permit and who needs one?
A seller's permit, also called a sales tax permit or sales tax license, is a state registration that authorizes a business to collect sales tax from customers and remit it to the state, and it is required for nearly any business selling taxable goods, and in many states taxable services, to buyers in that state.
What the permit actually authorizes
A seller's permit registers the business with the state revenue agency as a sales tax collector. It assigns a tax account, sets a filing frequency, and legally obligates the business to charge tax on taxable sales, file returns, and remit what it collects. In most states the permit itself is free or low cost; the obligation it creates, accurate collection and on-time remittance, is the real weight of it.
Who needs one
Any business making taxable retail sales in a state generally needs that state's permit before the first sale: retailers, restaurants, e-commerce sellers shipping into the state above its economic nexus threshold, wholesalers in states that register them, and service businesses in states that tax their services. Since the Supreme Court's Wayfair decision in 2018, physical presence is no longer the test: enough sales into a state can require registration on its own.
Which agency issues it and what it is called
The issuing agency is the state department of revenue or its equivalent, and the name varies: seller's permit in California, sales tax permit in Texas, Certificate of Authority in New York, transaction privilege tax license in Arizona, sales and use tax registration in many others. The names describe the same instrument: authority to collect the state's sales tax.
Resale certificates are the other half
The permit also lets a business buy inventory tax free for resale by issuing resale certificates to suppliers. A resale certificate is not a separate license; it is a document the permit holder signs. Misusing one, buying items for the business's own use tax free, is a common audit finding.
How Cornerstone helps
Multi-state sellers face the registration problem at scale: each state has its own application, its own filing calendar, and its own penalties. Our business licensing practice registers companies for sales tax across every state where they have nexus and keeps the renewals and updates current, alongside the general registrations covered in our business licensing service.
Frequently asked questions
Is a seller's permit the same as a business license?
No. A business license authorizes operating a business, usually at the city level; a seller's permit authorizes collecting sales tax, at the state level. Most retail businesses need both, and our answer page on business license vs seller's permit walks through the differences.
Do online sellers need a seller's permit?
Usually yes, in their home state and in any state where they exceed the economic nexus threshold, commonly set around a dollar amount of annual sales into the state. Marketplace sellers are partly covered by marketplace facilitator laws, but direct-channel sales remain the seller's responsibility.
What does a seller's permit cost?
Most states issue the permit free or for a small fee, and a few require a deposit or bond for businesses with a collection history. The recurring cost is compliance: filing returns on the state's schedule even for zero-sales periods.
Business licensing
File the licenses your business actually needs
Cornerstone maps the license stack for your business model, files the state-level registrations and applications, and keeps every renewal current.