Sales Tax Registration: The Latest and What’s Involved

Since the 2018 South Dakota v. Wayfair Supreme Court ruling, nearly every state has enacted laws requiring remote sellers to register and collect sales tax. Fast-forward to 2025, and sales tax registration has only grown more complex, especially for online sellers and businesses expanding across state lines.

If your business is selling in multiple states, you may be wondering:
When do I need to register for sales tax? What does the process look like? And how do I avoid costly mistakes?

This guide walks you through the latest requirements, what to expect, and how to get started.

Step 1: Assess Your Nexus Footprint

Before registering for sales tax, you need to determine where your business has nexus; the legal connection that creates a tax obligation in a state.

Economic Nexus

• Economic nexus is based on sales volume or transaction count in a state.
• For example, South Dakota’s economic nexus threshold is $100,000 in sales or 200 transactions annually (many states are now removing the transaction threshold).
• Nearly every state with a statewide sales tax has adopted some form of economic nexus after the Wayfair decision.

Physical Nexus

Don’t overlook physical presence, which can still trigger nexus in many states. You may create physical nexus if your business:

• Has employees or contractors in a state (including remote staff)
• Maintains a warehouse or office
• Sends sales reps or service techs to a state
• Stores inventory with a marketplace facilitator like Amazon

Important: Nexus rules differ by state, so be sure to evaluate both economic and physical triggers.

Step 2: Understand Your Taxability

Even if you have nexus, you may not need to collect tax; it depends on whether your products or are taxable in that state.

• Tangible personal property (TPP) is generally taxable in most states
• Services are usually exempt, but not always
• SaaS may be treated as taxable TPP in some states, despite being a service

Before you register, review the sales taxability rules for what you sell. In some states, you may also be required to estimate your taxable sales to determine your filing frequency.

Step 3: Registering for Sales Tax

Sales tax registration is handled by the state’s Department of Revenue (or Taxation). When you register, you’ll receive a Sales Tax ID Number (also called a seller’s permit or license), which authorizes your business to collect and remit sales tax.

Where to Register

• Directly through the state’s revenue department
• Via the Streamlined Sales Tax Registration System (SSTRS); available for participating states
• Through third-party providers (if registering in multiple states)

What You’ll Need

Most applications require:

• Start date of taxable sales in the state
• Business and contact information
• Responsible party details (often C-level executives, including Social Security numbers)
• Product/service descriptions
• Estimated taxable sales volume

Be cautious: Some states may require you to register with the Secretary of State before applying for a sales tax permit.

State-by-State Sales Tax Registration Requirements

Sales tax registration costs, processes, and nuances vary by state. Here are a few examples:

• Arizona: $12 for a Transaction Privilege Tax (TPT) license per location; cities may charge additional fees.
• California: No fee for a seller’s permit, but security deposits may be required.
• Ohio: $25 for in-state vendors; free for remote sellers.
• South Carolina: $50 non-refundable license fee; remote sellers may also need a retail license.
• West Virginia: Register through the West Virginia Tax Division or the SSTRS.

Also, keep in mind: Most states now require electronic filing and payment of sales tax. Failing to e-file may result in penalties.

Step 4: Know Before You Register

Don’t rush into registration without first reviewing whether you have any prior period exposure. Registering in a state could make you ineligible for a voluntary disclosure agreement (VDA); a tool that allows businesses to minimize past tax liabilities and penalties.

Consult with a sales tax expert to evaluate your exposure and determine the best course of action before proceeding.

Why Sales Tax Registration Matters

Failure to register and comply can result in:

• Audits
• Interest and penalties (up to 25% of tax due in some cases)
• Criminal charges for knowingly collecting tax without remitting

In short: Not registering in states where you have a tax obligation can be costly.

But registering incorrectly, or too soon, can be just as risky.

Need Help Navigating Sales Tax Registration?

Whether you're registering in one state or forty, staying compliant takes knowledge, time, and the right support. At TaxConnex, we specialize in helping businesses:

• Determine where they have nexus
• Understand what’s taxable
• Register properly in each applicable jurisdiction
• Maintain compliance over time

Contact TaxConnex to find out how we can help manage your Sales tax registrations and ongoing compliance—without the stress.