📝 What Is a Sales Tax Permit?
A Sales Tax Permit (also called a Seller’s Permit or Sales Tax License) is a state-issued authorization that allows your company to:
- Collect sales tax from customers within that state
- Remit the collected tax to the state’s Department of Revenue
- Operate as a compliant retail or e-commerce business
This is different from a Resale Certificate, which allows you to buy tax-free. The Sales Tax Permit is for collecting tax from buyers — especially if you have nexus in the state.
📍 What Is Nexus?
Nexus is a legal term that means you have a significant connection to a state. This connection requires you to collect sales tax from buyers in that state.
You may have nexus if:
• You store inventory in that state (e.g., Amazon FBA warehouses)
• You have employees or contractors working in that state• You exceed the economic threshold (e.g., $100,000 in sales or 200 transactions per year)
• You have a physical presence like an office or 3PL warehouse
Once you trigger nexus, you’re legally obligated to register and collect sales tax in that state.
🎯 Who Needs a Sales Tax Permit?
• Amazon FBA sellers shipping from U.S. fulfillment centers
• Shopify or WooCommerce sellers targeting U.S. states with high traffic
• Non-resident business owners who store inventory in the U.S.
• Businesses that surpass state-specific economic thresholds
• Anyone invoicing U.S. customers with tax applied
Why Register for a Sales Tax Permit?
• ✅ Avoid state-level tax audits and penalties
• ✅ Comply with marketplace requirements (Amazon, Walmart, etc.)
• ✅ Build trust with U.S. customers by charging tax properly
• ✅ Access to marketplaces and wholesale platforms that require permit ID
• ✅ Stay legally safe while scaling inside the U.S.
⚠ What Happens If You Don’t Register?
• The state can charge back taxes + penalties + interest for every unpaid transaction
• Your business may face legal action or sales tax audit
• Marketplaces like Amazon may suspend your account
• You’ll lose access to platforms or supplier networks that require permit proof• You may be personally liable for uncollected tax if you’re the owner
🧾 State-by-State Requirements
Each state has different rules for:
• Nexus thresholds
• Filing frequency (monthly, quarterly, annually)
• Required documentation
• Minimum tax collection obligations
• Marketplace facilitator laws (in some cases, platforms collect on your behalf)
INCHUB helps determine where you have nexus and register your business accordingly.
🛠 What’s the Difference Between Sales Tax Permit and Resale Certificate?
| Feature | Sales Tax Permit | Resale Certificate |
|---|---|---|
| Purpose | Collecting sales tax from customers | Buying inventory tax-free |
| Who issues it | State tax authority | State tax authority |
| Who needs it | Sellers with nexus in a state | Buyers of goods for resale |
| Required for tax remittance | ✅ Yes | ❌ No |
🕒 When Should You Apply?
• As soon as you establish nexus in a U.S. state
• Before launching your e-commerce store
• Before activating Amazon FBA or U.S.-based fulfillment
• As part of your U.S. tax and compliance planning
• When reaching thresholds in multiple states (multi-state compliance)
💡 Expert Tip from INCHUB
“If you’re selling inside the U.S., collecting sales tax isn’t optional — it’s law. The sooner you register, the more compliant, scalable, and trustworthy your business becomes.”
