Does My Business Need a Seller's Permit?

Key takeaways

• A seller's permit authorizes your business to create a tax account and collect local sales tax on taxable goods or services.
• Whether or not you need a seller's permit depends on state tax laws and the nature of your business.
• Not all states require a seller's permit, and many states that do issue permits do so at no cost.
• The application process typically involves submitting basic business information to your state's tax authority.
• Once you have your permit, you need to display it, collect sales tax consistently, and file regular state tax forms to maintain compliance.

What is a seller's permit?

A seller's permit authorizes your business to collect sales tax on taxable goods or services within a specific jurisdiction. It registers your business with state or local tax authorities and provides a unique sales tax ID number.

Some states have different names for this permit, such as the following:

• Sales tax permit
• Sales tax license
• Sales and use tax permit
• Retail license
• Vendor's license

Who needs a seller's permit?

Whether your business needs a seller's permit depends on several factors, including your location and the nature of your business. Typically, the following business types need a permit in jurisdictions that collect sales tax:

• Retail and wholesale businesses. Most businesses that sell or lease tangible personal property require a seller's permit, regardless of whether they operate as retailers or wholesalers. This includes traditional brick-and-mortar stores, online retailers, manufacturers selling directly to consumers, and wholesale distributors (in some states).
• Online and ecommerce businesses. Businesses that sell online may need a permit. This applies to online marketplaces sellers like Amazon or eBay, social media platforms, or mobile apps. Even dropshipping businesses that don't maintain physical inventory often need to obtain seller's permits in states where they have economic presence.
• Service providers and special cases. Some states require service providers (such as those in repair, cleaning, or hair dressing) to obtain a permit and collect sales tax. This can even include professional services like attorneys, consultants, architects, and other professionals that offer taxable services depending on state law.
• Temporary and seasonal businesses. This includes holiday retailers, farmers’ market vendors, craft fair participants, and pop-up shops. Many states offer temporary seller's permits for businesses operating for limited periods, typically 90 days or less, with simplified application processes and reduced fees.

States without sales tax

As of 2025, these four states have no sales tax:

• New Hampshire
• Montana
• Oregon
• Delaware

Since they do not require sales tax, these states do not issue seller’s permits.

Seller's permit vs. resale certificate vs. business license

These are three important—but distinct—documents that authorize certain business activities. While they may seem similar, they're not interchangeable and obtaining one doesn't eliminate the need for the others.

• A seller's permit specifically authorizes your business to collect sales tax from customers and send it to state authorities. It establishes your business as a registered tax collector and includes a unique identification number that you use when filing tax returns. This ID is different from an employer identification number (EIN).
• A resale certificate is a certificate you provide to suppliers when purchasing goods that you intend to resell. It allows you to buy inventory without paying sales tax, because you'll collect tax when you sell the items to customers.
• A business license simply permits your business to operate within a specific jurisdiction. It addresses general business operations, zoning compliance, health and safety requirements, and professional qualifications. They are often issued at the local level but may also be issued by the state or federal level.

How to get a seller's permit in 5 steps

Obtaining a seller's permit is a little different from state to state, but the process looks very similar across the board.

Step 1: Determine your state's requirements

Before beginning the application process, research your specific state and local requirements to understand exactly what permits you need. Start by visiting your state's taxation authority (usually the Department of Revenue), as these agencies typically handle seller's permit applications. Some states also require local permits from cities or counties, so check with local government agencies as well.

Step 2: Gather the required documentation

Most states require similar basic information for seller's permit applications. You'll typically need to provide the following:

• Your business' name and address
• Federal employer identification number (EIN) or personal Social Security number (if you don't have an EIN)
• Business structure information
• Business activity or NAICS code
• Bank account information
• Estimated monthly or annual sales figures

Additional documentation may include your business license, articles of incorporation or organization, partnership agreements, and information about business owners or partners.

If you haven’t already formed your business, register with the Secretary of State or state business agency and obtain an EIN from the Internal Revenue Service (IRS).

Step 3: Complete the application and pay fees

States generally prefer you to file online applications through the state's business portal or tax authority website, but you can often also file by mail or in person (although this tends to cost more). You can also work with an online service like LegalZoom that will facilitate the application process for you.

Many states issue seller's permits at no cost, such as the California Department of Tax and Fee Administration. Other states charge application fees that range from $10 to $100 based on your business type. Once you submit your application, keep copies of receipts for your records.

Step 4: Receive and verify your permit

After the state approves your application, you'll receive your seller's permit either electronically or by mail. This may be immediate or after several weeks depending on your state's process and whether you filed online or by mail. Most states provide tracking systems that allow you to monitor your application status online.

Your permit will include important information such as your state tax ID number, effective date, and any special conditions or restrictions. Some states require you to renew your permit, while others offer permits that stay valid as long as your business operates and files returns.

Step 5: Maintain compliance requirements

Once you have your permit, make sure you understand your compliance obligations. Generally, you need to display your permit at your business location where customers can see it. If you sell online, some states require you to post permit information on your website or provide it upon customer request.

Be sure to file regular tax returns according to your filing schedule. Typically, these range from monthly to annually based on your sales volume.

How LegalZoom can help with business compliance

For many new businesses, it can feel overwhelming to navigate various licensing and permit requirements while juggling startup tasks. LegalZoom's business formation services help you establish your business, obtain the right permits, and maintain good standing with tax authorities.

Our formation services include guidance on permit requirements specific to your business type and location. We also help existing businesses apply for permits and licenses through a unique combination of attorney-vetted and AI-detected requirements to help you stay on track.

Once you're up and running, our compliance coverage helps you maintain your business's good standing with reminders for important deadlines, assistance with required filings, and access to legal professionals who can answer your questions. Our goal is to help you focus on growing your business while we handle the administrative details that keep you compliant.

Seller's permit FAQs

How much does a seller's permit cost?

Most states issue seller's permits at no cost. However, some states charge modest application fees that range from $10 to $100 depending on your business type and projected sales volume. Beyond any application fees, the primary costs associated with seller's permits relate to ongoing compliance rather than the permit itself.

This includes point-of-sale systems, accounting software, and professional services if you need help with complex tax situations. These investments typically pay for themselves through improved accuracy and reduced noncompliance risk.

How long does it take to get a seller's permit?

That depends on both your state and application method (online applications typically process faster). Some states provide immediate approval for straightforward online applications. Most states process complete applications within 3–10 business days, but this is often not guaranteed.

Do I need a seller's permit for online sales?

Yes, most online businesses that sell taxable goods need seller's permits. In this case, the location of your customers—not your business—often determines permit requirements. If you sell to customers in states where you have “economic nexus” (typically defined by sales volume or transaction thresholds), you likely need a permit in those states.

Can I use my seller's permit in multiple states?

No, seller's permits are state-specific documents that only authorize tax collection within the state that issues them. If you sell products to customers in multiple states, you may need separate permits in each state where you have an economic or physical presence, such as inventory or an employee working in the state.

However, some states have reciprocal agreements or simplified processes for businesses already registered in other states. For example, the Streamlined Sales Tax Project has created standardized processes that make multi-state registration easier for qualifying businesses. It's important to research each state's specific requirements and consider working with tax professionals who specialize in multi-state sales tax compliance.

What happens if I operate without a required seller's permit?

Operating without a required seller's permit exposes your business to significant legal and financial consequences. States can impose substantial penalties including back taxes on all sales made without a permit, penalty fees ranging from 25–100% of taxes owed, and interest charges calculated from the date of each sale.

Beyond financial penalties, states can shut down businesses that operate without proper permits, impose personal liability on business owners for unpaid taxes, and pursue criminal charges for serious violations. 

Is a seller's permit the same as a business license?

No, a business license provides general authorization to operate your business within a specific jurisdiction. It typically addresses zoning compliance, health and safety requirements, and professional qualifications. In contrast, a seller's permit authorizes you to collect taxes within that jurisdiction. 

How often do I need to renew my seller's permit?

That depends on the state. Some states require annual renewals and fees, while others provide permits indefinitely as long as you file tax returns and maintain good standing with tax authorities. States with renewal requirements typically send notices 30–60 days before expiration, but you should maintain your own renewal calendar to stay up to date. 

What information do I need to apply for a seller's permit?

Most states require similar basic information, including the following:

• Your business name and address
• Federal employer identification number (EIN) or Social Security number
• Business structure (sole proprietorship, LLC, corporation, etc.)
• Estimated monthly or yearly sales figures
• Description of the types of products or services you plan to sell

Michelle Kaminsky, Esq., contributed to this article.