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The consumption tax levied on consumers for the sale of goods and services is known as sales tax. The sales tax in the US is on the state level and has its own sales tax rules and regulations. The US sales tax registration process is also complex, and businesses are required to ensure compliance with the respective stateโs sales tax regulations.
In the US, it is mandatory to register for sales tax in each state where you meet the economic or physical nexus standard. For companies that are operating out of the state, the economic nexus will be the applicable standard. The economic threshold for sales tax registration is based on either the transaction volume or sales revenue. The companies that have physical presence, like an office or a headquarters, will be applicable for physical nexus.
Sales tax registration in the US is with an individual stateโs Department of Revenue. To legally collect sales tax, a US sales tax registration permit is a mandatory step.
Statewide Sales Tax in 45 States & District of Columbia
13,000+ Sales Tax Jurisdictions Exist in the US
100% of US States with Sales Tax Enforce Economic Nexus
E-commerce Accounts for over 20% of Total US Retail Sales
Sales Tax Filing Frequency Based on Revenue Volume
Multi-state Sales Tax Registration
The US marketplace sales tax compliance is made easy with Enterslice. We automate global tax compliance so that you can identify your sales tax obligations. Connect with our experts for sales tax filing service in the USA.
In the US, if your business has legal obligations in multiple states, you can register for sales tax through the Streamlined Sales Tax Registration System (SSTRS). This system allows 24 member states for US sales tax registration through a single application.
The benefits of sales tax registration in the US include:
Sales tax registration in the US provides you with a permit that gives you the legal authorization to collect sales tax on behalf of the government from consumers.
Sales tax registration in the US state where your business meets the set standard of nexus reduces the complications during tax audits and makes business operations smoother.
If your state is a member of the Streamlined Sales Tax (SST) program, you can access the Certified Service Providers (CSPs) system that provides automation for compliance requirements.
The sales tax provides a stable source of revenue for the government to fund public services. It ensures a predictable flow of income, especially in uncertain economic times.
Sales tax is applied across various types of goods and services, making it easy and simplified to collect, as the sales tax contributes to a broad tax base for the state government. It is one of the benefits of US sales tax registration.
Since sales tax is collected during the sale, it simplifies the administrative burden for both the government and the business, making compliance and collection easier.
To register the sales tax in the US, you will have access to the official online portal of the respective Department of Revenue. The process involves:
The first step is to determine where you have nexus in the US, as you will have to register and collect sales tax in the state where you have either physical nexus or economic nexus.
The second step is to prepare and gather the mandatory documents required for sales tax registration in the US, such as EIN, trade name, business structure and identity information.
Once your documents are ready, you will have to access your stateโs Department of Revenue online portal. You will have to navigate to the US sales tax registration section and fill out the form with supporting documents.
Fill out the application form accurately with all the required information, such as EIN or SSN, contact information, and NAICS code, etc., so that there are no delays. After review, you can submit the application.
After you have submitted the form in the online portal, you may have to pay the fees online. Although some states do not have any charges, it depends on the respective state.
The last step is to wait for approval, which will take around 1 to 2 weeks, depending on the state. Once approved, you will obtain your sales tax permit either electronically or by mail.
The sales tax in the US is paid by the buyer. The consumer pays for the sales tax when buying a service or a product, and the fund is eventually remitted by the business to the government. The business seller is therefore a mediator between the consumer and the government.
The businesses must ensure that the sales tax rate collected is accurate and correctly file the sales tax in compliance with the respective state laws. Therefore, the responsibility and the tax burden are eventually shared by both the business and the buyer and benefit the entire society.
Talk to Enterslice consultants, and let us help you overcome the challenges with minimum effort.
Businesses that have a nexus in the US are required to get a sales tax permit in the US. In the US, there are two standards of nexus: one is physical nexus, and the other is the economic nexus. The rules apply to both online and offline business sellers.
There are common mistakes made by businesses with the US sales tax, which include:
The sales tax laws in the US are diverse, as the tax rate varies across states. The important compliance and legal requirements for US Sales tax registration are mentioned below-
Failing to register and pay sales tax in the US will lead to serious charges, including a financial penalty, large fines and may even lead to criminal charges. Businesses that are neglecting the sales tax obligations in the US will have to bear the consequences.
If your business meets the standard of the nexus, it is mandatory for you to register your business for sales tax in the individual state where your business has a legal obligation. The common consequences for failing to register are increased audit risk, loss of business license, damage to the reputation and company valuation, and significant penalties.
Enterslice, with an experience of over 10+ years in global business and legal consulting, will help you navigate the sales tax laws of the US. We have a team of expert legal, financial and tax experts that can help you stay in compliance with the regulatory laws. The key reasons why Enterslice is your ideal partner for US Sales tax registration-
The sales tax in the US is a consumption tax, which is an indirect tax levied by the business on the sale of goods and services, but paid by the end consumer. The business is responsible for charging the sales tax on the customer and then remitting the tax to the local state authority on time. In the USA, the sales tax is regulated at the state level with varying rates.
To register for US sales tax registration, you will have to apply online through the Department of Revenue in the state where you are doing business. Most of the states in the US allow businesses to register online through the official portal. Additionally, if you have business in multiple states that are under the Streamlined Sales Tax Agreement (SST), you can register all of them through the SSTRS website.
In the US, the state with the highest sales tax is Louisiana, with a sales tax of 10.11%. This tax rate is a combination of the local sales tax rate of 5.11% and a state sales tax rate of 5.00%. Louisiana has a high sales tax rate, as it heavily relies on it because the stateโs other taxes are kept low.
According to the new update, five states in the US do not impose any sales tax: Alaska, Oregon, Montana, Delaware and New Hampshire. These five states in the US are often referred to as the NOMAD.
The most tax-friendly state in the US currently is Alaska. The overall tax burden of Alaska is lower compared to other states in the US, as it does not have any sales tax or individual state income tax. The overall tax rate of Alaska is 4.93%, making it the most tax-friendly state in the country.
In the US, most of the states have a uniform sales statewide tax rate; however, in some other states, there are extra local sales tax rates, such as on a municipal, county and district level. Therefore, the exact sales tax rate and regulations in the US will vary, depending on the state.
The US Sales Tax Rate in 2025
In the US, the economic nexus is a legal standard that allows a specific state to require a business to collect sales tax and remit to the tax authority, solely depending on the value or volume of the financial activity within the state, even without any physical presence. The economic nexus will assess whether the business can collect and remit sales tax.
Key Points of the Economic Nexus in the US:
The economic threshold in the US for sales tax is based on the individual state. However, there are three types of threshold categories depending on the trigger. The first threshold trigger is based on sales value, which is usually $100,000, $500,000 or $250,000; the second trigger is based on the number of transactions, which is usually 200 and a few states do not have any sales tax.
Yes, removing the transaction threshold will simplify the compliance for sales tax in the US. It simplifies the transaction, mostly for small businesses and small online sellers. Removing the transaction threshold also reduces the administrative burden.
Businesses will have to register for sales tax, provided they meet state thresholds, which is an economic nexus, to legally collect sales tax from consumers and remit the collected tax to the state and local government. The registration process for sales tax in the US is managed by the individual stateโs Department of Revenue.
Why Registration for Sales Tax is Important
You need to register for sales tax individually with the respective state in the US. However, if the state you are registering in is a member of the Streamlined Sales Tax (SST), you can register for sales tax at the same time for multiple states through the SST system.
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