How to Register for Sales Tax in Any US State: A Step-by-Step Guide for 2025

Sales tax may not be the most exciting part of entrepreneurship, but skipping it could cost you big.

However, for online sellers, digital entrepreneurs, e-commerce brands, and remote-first founders, US sales tax rules may often feel tricky to handle. 

Between state-specific thresholds, confusing terminology, and fast-changing requirements, it’s easy to feel stuck.

This guide is your shortcut to clarity. 

Whether you’re expanding to new states, already triggered nexus without realizing it, or just want to avoid fines and audits, we’ll walk you through exactly how to register for sales tax in any state and stay compliant.

📌 Need help now? doola can handle sales tax registration for you!

What Is Sales Tax? Why Registration Matters?

Sales tax is a state-imposed tax that businesses must collect from customers on the sale of taxable goods and services. The rate and rules vary by state, but the obligation is the same: if you’re doing business in a state, you may need to collect and remit sales tax.

Why Sales Tax Registration Matters in 2025

Sales tax compliance isn’t just legal formality, it’s integral to running a legally sound, trustworthy, and scalable business. 

Whether you’re shipping products across state lines or selling digital goods online, understanding when and where to register for sales tax could save you from a financial (and reputational) mess down the road.

Here’s why it matters more than you think:

1. It’s a Legal Mandate (Not a “Nice-to-Have”)

If you’re doing business in a state where you have nexus, which could be triggered by physical presence, employees, or even a certain amount of sales, you’re legally obligated to register and collect sales tax there.

Failing to do so isn’t just an oversight, it’s non-compliance, and it opens the door to audits, penalties, and potential shutdowns.

2. Penalties and Interest Add Up Fast

States take sales tax seriously and they have the power to retroactively assess taxes, impose hefty penalties, and charge interest on missed payments. If you’ve been collecting without registering or haven’t been collecting at all, the liability can spiral quickly.

Let’s break it down:

Imagine you run an ecommerce brand that sells custom T-shirts nationwide. In the past year, you made $60,000 in sales to California customers, and California’s average sales tax rate is 7.25%.

Here’s how your total liability builds up:

If you didn’t register and remit that tax, California could come knocking, and you’d be on the hook for over $5K in back taxes, penalties, and interest. 

3. It Builds Customer Trust

Having a valid sales tax permit doesn’t just keep you compliant, it indicates credibility. When customers see tax calculated at checkout, they know they’re dealing with a legitimate, established business, not a fly-by-night side hustle.

It also helps prevent awkward post-purchase surprises (like an unexpected bill from a state auditor).

Example Scenario: Selling T-Shirts to California

Let’s say you run an online T-shirt business based in Texas. You ship nationwide through Shopify and Etsy.

• You made $60,000 in sales to California last year.

• That crosses the economic nexus threshold (California requires sales tax registration if you hit $500,000 in annual sales, so you’re under that, but let’s say you opened a warehouse in LA to speed up shipping. Now you have physical nexus).

• You must register, collect, and remit California sales tax.

Here’s a side-by-side comparison of what happens when you proceed with vs. without proper sales tax registration:

Check out doola’s comprehensive Sales Tax Guide to learn more.

So, when does your business actually need to register for sales tax and what’s the right way to do it? Coming up next! 

When Do You Need to Register for Sales Tax?

Let’s now talk sales tax nexus: the rule that determines where you need to register.

Sales tax compliance starts with one critical question: 

Where are you legally required to collect and remit tax?

Nexus, essentially, is the threshold that gives a state the authority to tax your sales. And yes, it can be triggered even if you’ve never stepped foot in that state.

There are two main types of nexus, and understanding them can make or break your compliance strategy.

Physical Nexus: When Your Business Has Footprint in a State

Physical nexus means you have a tangible presence in a state. That could be an office, a warehouse, a storefront, or even a remote employee.

Example Scenario: 

You run a candle brand based in Oregon and decide to open a pop-up kiosk in Denver, Colorado, for the holidays. That temporary retail space creates physical nexus in Colorado, meaning you must:

• Register for a Colorado sales tax permit

• Collect local and state sales tax at the point of sale

• File returns with the state, even if it was a seasonal setup

In short, even temporary footprints leave a tax trail, and the state will expect you to follow it.

Economic Nexus: When Sales Volume Alone Triggers Liability

Economic nexus is based on your sales revenue or transaction count in a particular state, regardless of whether you have a physical footprint there.

Example Scenario: 

Let’s say you sell artisan pet supplies online and ship nationwide from New Jersey. In the past year, you made $110,000 in sales to Illinois through 150 transactions.

Now, Illinois has a $100,000 threshold (or 200 transactions) for economic nexus.

So even though you didn’t hit the transaction count, your revenue crossed the threshold, so you’re now required to:

• Register with the Illinois Department of Revenue

• Collect appropriate sales tax at checkout

• Remit tax and file returns, monthly or quarterly, depending on your volume

If you don’t, you risk being retroactively assessed, with added penalties and interest.

Now that you know how sales tax nexus works, let’s look at the most common triggers, the situations that quietly create nexus without many entrepreneurs realizing it.

What Triggers Sales Tax Nexus? Examples and Implications 

Sales tax obligations aren’t always obvious. You might think you’re off the hook, until a trade show or a few hundred Etsy orders push you over the line.

Here are the most common ways businesses trigger nexus:

📌 Pro Tip: Nexus isn’t static, it evolves as your business grows. So, track sales across states proactively, as nexus can sneak up on you if you’re not monitoring.

Use a tool (or a compliance partner like doola) to track sales across states, monitor inventory locations, and flag new nexus triggers before they become expensive headaches.

How to Register for Sales Tax in Any State in the US

While each state has its quirks, the core registration process looks something like this:

Step 1: Determine Your Nexus

Start by identifying where you’re legally required to register.

Here’s a quick checklist you’d need to tick off:

• Are you storing inventory in a state?

• Have you surpassed 200 transactions or $100K in sales in the past 12 months?

• Do you have remote employees or contractors in any state?

📌 Tip: Tools like spreadsheets, Shopify reports, or doola’s sales tax compliance services make tracking nexus easier.

Step 2: Gather Your Business Information

Before you log in to any state’s website, make sure you gather these details:

• EIN (Employer Identification Number): This 9-digit federal tax ID is like a social security number for your business required on all official forms.

• Legal business name and address: Use your exact registered name and physical or mailing address as listed with the IRS.

• Business entity type: Whether you’re an LLC, S-Corp, or sole proprietorship, states need to know how you’re structured.

• NAICS Code (North American Industry Classification System): This 6-digit code categorizes your business activity for tax and statistical purposes.

• Start Date of Taxable Sales: States want to know when you first started making taxable sales so they can determine filing obligations and backdated requirements.

Not sure about your NAICS code? Use the US Census Bureau’s NAICS Lookup Tool or let doola take it off your plate and assign the right one for you.

Step 3: Visit the State’s Tax Website

Each state has its own online tax portal, and no, they’re not all created equal. While Florida makes registration a breeze, states like California and Texas come with more legal complexities.

Want to register in multiple states from a single dashboard? Sign up for doola’s services to do it all at once.

Step 4: Complete the Registration Form

During registration, you’ll be asked to provide key information such as your business’s ownership structure, legal entity type (e.g., LLC, Corporation), and the exact date you began taxable sales or when you established nexus in that state. 

Make sure every detail is accurate to avoid processing delays or compliance issues later on.

📌 doola Tips:

• Your business start date might differ from the date you hit economic nexus, both matter.

• Double-check your info before submitting. Mistakes can delay processing or trigger rejections.

Read doola’s Sales Tax Guide 2025 for more actionable tips.

Step 5: Receive Your Sales Tax Permit

Some states offer instant permits, others take a few days or even weeks. Permits are typically sent via email, physical mail, or instant download from your account

Once you’ve received your sales tax permit:

• Display your permit prominently at your storefront/office if mandated by state law

• Collect and remit sales tax and send it to the states where you have nexus

• Update your POS system or e-commerce platform to reflect your new tax settings

• Mark your calendar with your filing deadlines (monthly, quarterly, or annually)

Feeling overwhelmed by sales tax registration or strapped for time while growing your business? Let doola take the wheel. 

We manage your registrations, keep tabs on deadlines, and ensure you stay fully compliant, so you don’t have to.

Book a free demo and let’s make sales tax registration easy for you!

Key Differences Between Sales Tax in Different States

When it comes to sales tax, each state writes its own rules, from how often you file to which portal you use. And if you’re selling in multiple states, the complexity compounds fast.

These varying requirements can impact your cash flow, filing cadence, and overall compliance strategy. Miss a deadline or register incorrectly, and you’re looking at penalties, or worse, an audit.

Here’s a peek into how four major states do things differently:

Example: Say you’re selling planners online and your business grows into Texas and Florida. You’ll need to file monthly in both states, but through totally different systems, each with its own quirks and due dates. 

That’s a lot to juggle without automation!

Overwhelmed by the complexities? Why not just doola it already!

Our compliance tools track filing requirements by state, send reminders, and ensure your business never misses a beat.

Common Sales Tax Mistakes to Avoid in 2025

According to the Tax Foundation: 

Businesses spend over $5 billion annually just trying to comply with sales tax regulations. 

Because sales tax mistakes can lead to audits, penalties, or tens of thousands in lost revenue.

So, before you find yourself drowning in tax notices or refunding hundreds in wrongly collected sales tax, let’s break down the most common (and easily avoidable) mistakes founders make, and how to steer clear of them altogether.

❌ Registering before you actually have nexus

Eager to be compliant, some businesses jump the gun and register for sales tax in states where they haven’t triggered nexus yet. 

That means you’re now obligated to file returns, even if you don’t owe any tax.

✔️ doola’s Solution for doers

Confirm your nexus first. 

Evaluate both physical nexus (like inventory or an employee in a state) and economic nexus (like hitting a revenue or transaction threshold). 

Use tracking tools, platform reports, or partner with a service like doola’s sales tax solution to monitor where your obligations actually exist before registering.

❌ Forgetting to file “zero returns” (even if you had $0 in sales)

You didn’t make any sales last month, so you skipped your filing. Seems harmless, right? It’s not. 

Most states still require a sales tax return, even if you collected nothing.

✔️ doola’s Solution for doers

Mark your filing calendar and automate reminders. Or better yet, let doola handle your ongoing compliance. We file your zero returns too, so you’re not hit with penalties for “missing” returns you didn’t think you needed to file.

❌ Collecting sales tax without a valid permit

You added sales tax to your customer’s checkout before you were officially registered. This is a red flag for tax authorities and can result in fines or forced refunds.

✔️ doola’s Solution for doers

Never collect sales tax until your permit is approved. Register first, then start charging tax. Using doola’s sales tax registration service ensures you’re only collecting when it’s 100% legal to do so.

❌ Not updating business details when they change

You changed your address, business name, or business structure, but forgot to update it with the states where you’re registered. Now, inconsistent records can delay returns, cause compliance issues, or even invalidate your permit.

✔️ doola’s Solution for doers

Keep a master checklist of where your business is registered, and anytime a major detail changes, update each state’s tax department. Or, sign up for doola’s services. 

We maintain your records across states so nothing falls through the cracks.

❌ Missing filing deadlines and incurring penalties

With different states come different filing schedules: some monthly, others quarterly or annually. Miss just one and you could face fines, interest, or a revoked permit.

✔️ doola’s Solution for doers

Use a digital calendar or tax software that reminds you of state-specific deadlines or delegate the stress to doola’s compliance team. 

We keep you compliant, on time, and stress-free.

📊 Think You’re on Top of It? Take This 3-Second Quiz:

• Are you charging sales tax in states where you aren’t registered?

• Have you tracked your nexus activity in the last 3 months?

• Do you know your next filing deadline?

If you said “no” or “not sure”, doola has your back. Speak to a tax expert today and let’s get your sales tax compliance locked in, so you can scale without surprises.

Expert Tips for Staying Compliant Post-Registration

Sales tax compliance isn’t a one-and-done task. It’s a recurring responsibility that follows you as your business grows across state lines, expands product offerings, or shifts structure. 

So, getting your permit is just the beginning. Staying compliant is where the real work begins and here’s how to stay ahead of the curve:

File Sales Tax Returns on Time

Each state has its own filing frequency, monthly, quarterly, or annually, based on your sales volume. And yes, even if you made zero taxable sales during a period, you may still be legally required to file a “zero return.”

Miss a deadline, and you could face late fees or interest charges. Even worse? It could trigger an audit.

📌 Pro tip: Automate due-date tracking with tools that sync to your sales platforms (or better yet, let doola handle it).

Remit the Taxes You’ve Collected

Collecting sales tax is only half the job. You must also send that money to the correct state tax agency by the due date.

Holding onto collected tax too long, or forgetting to remit altogether, can lead to major fines and jeopardize your business’s standing.

Avoid this trap: Set calendar reminders or use auto-remittance features with doola’s platform.

Keep Your Business Info Up to Date

Moved your headquarters? Changed your LLC structure? Got a new business address or ownership update?

You must report these changes to every state where you’re registered, and most states have specific timelines for doing so.

Failure to update can lead to misfiled returns, delays in permit renewals, or notices sent to the wrong address.

📌 Pro tip: With doola, updates are streamlined in one dashboard, not 20 different state portals.

Monitor Your Sales Across States

Economic nexus laws mean that as your revenue grows, you may unknowingly trigger nexus in new states, and that means new registrations and filings.

For example, selling $100K worth of products in Illinois could require registration, even if you’ve never set foot there.

If you’re still manually tracking sales across states, you’re playing a high-stakes game with compliance on the line. 

But if you’ve already started automating your sales tracking? That’s not just a smart move; it’s a strategic, mission-critical step toward staying audit-proof and ahead of the curve.

And you can simplify it all with doola’s Sales Tax Compliance Services. With our ongoing compliance support, you get:

• Automated filing across multiple states

• Reminders for due dates so you never miss a return

• Instant alerts when new nexus thresholds are met

• One dashboard to manage it all, no tax jargon required

Explore our services and see for yourself how seamless sales tax compliance can get.

Sales Tax Compliance Starts With doola: Sign Up Today!

Sales tax compliance isn’t a side hustle, it’s a year-round commitment. But juggling multi-state sales tax is like trying to tame a wild beast: exhausting, complicated, and full of unexpected pitfalls.

Luckily, that’s what doola is here for!

With doola, you get one sleek dashboard to manage registrations across all 50 states, automated filing reminders so deadlines never sneak up on you, expert support ready to tackle the trickiest questions, plus hassle-free reseller certificate and permit management.

Ready to scale your business with clarity and control, leaving surprises in the dust?

Schedule a demo today and watch doola transform your sales tax game!

FAQs

Do I need a permit in every state where I sell?

Only if you’ve triggered nexus. Track your sales volume and presence in each state.

Can I register before I reach a threshold?

Yes, early registration is allowed in most states. It’s better to be proactive.

What if I’m a non-US seller?

You may still have nexus and sales tax obligations if you sell to U.S. customers. doola can help.

Is sales tax different from income tax?

Yes! Sales tax is collected from customers and remitted to the state. Income tax is paid on your business’s profits.