What Is a Seller's Permit and How Do You Get One?

A seller's permit is a state-issued registration—also called a sales tax permit or a sales-and-use tax license—that authorizes your business to collect sales tax from customers on taxable sales. If you sell taxable goods (and in many states certain services) to customers in a state, that state generally requires you to hold a seller's permit before you make your first sale. You apply through your state's Department of Revenue or tax agency, and in most states it's free or costs only a few dollars.

What is a seller's permit, exactly?

Think of a seller's permit as the state giving you permission to act as its collection agent. When a customer pays sales tax at checkout, that money isn't yours to keep—you're holding it on the state's behalf and passing it along later. The permit ties your business to a tax account number so the state can track what you collect and expect regular returns from you.

The name varies by state, which trips up a lot of first-time owners. You might see it called a seller's permit (California), a sales tax permit (Texas), a Certificate of Authority (New York), or a sales-and-use tax license. They all do the same core job: they let you legally collect and remit sales tax.

Who needs a seller's permit?

In general, you need one if you sell tangible goods to customers in a state that charges sales tax. That covers most retailers, whether you run a storefront, a booth at a market, or an online shop. A few common triggers:

You sell physical products—clothing, food, electronics, handmade items, anything a customer takes home.
You sell taxable services. States differ widely here; some tax repairs, cleaning, or digital services, others don't.
You buy inventory wholesale to resell (more on the resale certificate below).

A handful of states—Alaska, Delaware, Montana, New Hampshire, and Oregon—don't have a statewide sales tax, so a traditional seller's permit may not apply the same way (though local taxes can still exist in places like Alaska). If you're unsure whether what you sell is taxable, your state's Department of Revenue publishes taxability guides, and it's worth reading before you assume you're exempt.

How is it different from a business license and an EIN?

This is the most common point of confusion, so here's the plain version. These are three separate things, and you may need all three.

A seller's permit is specifically about sales tax—collecting it and reporting it to the state.
A general business license is permission to operate your business at all, usually issued by your city or county. It says nothing about sales tax. Learn more about business licenses and permits.
An EIN (Employer Identification Number) is a federal tax ID from the IRS, used for income tax, payroll, and opening a business bank account. It's issued by the federal government, not your state.

In short: the EIN is federal, the business license is usually local, and the seller's permit is state-level and sales-tax-specific. Getting one doesn't cover the others.

How do you get a seller's permit?

The process is usually straightforward and can often be finished online in an afternoon. Here's the typical path:

Register your business first. Most states want your legal structure and business name in place before you apply. If you haven't done that yet, start by learning how to register your business.
Get your EIN if you'll need one—many state applications ask for it.
Find your state's tax agency. Search for your state's Department of Revenue, Department of Taxation, or Comptroller. That's where the application lives.
Complete the application. You'll provide your business details, ownership information, EIN or Social Security number, and a description of what you sell.
Wait for your permit. Many states issue a number immediately online; others mail a certificate within a couple of weeks.

Cost is usually nothing or a small fee. A few states require a security deposit for certain businesses, but that's the exception, not the rule.

Tip: Apply before your first sale, not after. Collecting sales tax without a permit—or selling taxable goods without collecting it—can lead to penalties, and back taxes come out of your pocket if you never charged the customer.

What is a resale certificate?

Once you have a seller's permit, you can usually get a related document called a resale certificate (sometimes a resale or exemption certificate). It lets you buy inventory from suppliers without paying sales tax yourself, because the tax will be collected when your customer buys the finished item. Without it, you'd pay tax on your inventory and your customer would pay tax again at checkout—double taxation on the same goods. You give the certificate to your wholesaler; you don't file it with the state.

What about online and out-of-state sales?

This is where things changed for e-commerce sellers. Under a concept called economic nexus, you can be required to register for a seller's permit in a state where you have no physical presence, simply because you sell enough there. Most states set a threshold—commonly around $100,000 in sales or 200 transactions in a year—and once you cross it, that state expects you to collect and remit its sales tax.

For a growing online business, this means you may eventually need permits in multiple states, not just your home state. You don't need to register everywhere on day one, but you should track your sales by state as you grow. If you're building a shop, our guide to selling online walks through the setup. Marketplaces like Amazon or Etsy often collect and remit sales tax on your behalf as "marketplace facilitators," which can simplify things—but it doesn't always cover sales from your own website.

How do you collect and remit sales tax?

Once you're permitted, the ongoing routine looks like this:

Charge the right rate. Rates vary by state and often by city or county. Most point-of-sale systems and e-commerce platforms can calculate this automatically if you enter your locations.
Keep the collected tax separate. Treat it as money you're holding, not revenue. A separate savings habit prevents nasty surprises at filing time.
File returns on schedule. Your state assigns a frequency—monthly, quarterly, or annually—based on your sales volume. You file and pay even in periods with zero sales, or you may owe a late penalty.

Missing a filing is a common first-year mistake, so put the due dates on your calendar the moment your permit arrives.

Frequently asked questions

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

No. A seller's permit is only about collecting and remitting sales tax at the state level. A business license is separate permission to operate, usually from your city or county. Many businesses need both.

How much does a seller's permit cost?

In most states it's free or costs just a few dollars. A small number of states charge a modest fee or require a security deposit for certain types of businesses, but the majority issue permits at no cost.

Do I need a seller's permit to sell online?

Usually yes, at least in your home state if you sell taxable goods. Thanks to economic nexus rules, you may also need permits in other states once your sales there cross a threshold, often around $100,000 or 200 transactions per year.

This is general information, not legal or tax advice; rules vary by state.

Figuring out which permits apply to you—and in what order—is exactly the kind of thing that stalls first-time owners. Scafflow builds you a personalized, step-by-step launch checklist so the seller's permit, business license, and EIN each show up at the right moment, not all at once.

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