US Sales Tax Registrations Explained

Overview of sales tax registrations, state requirements, and how Kintsugi manages them

Updated 3 months ago

This article explains what a sales tax registration is, the different types of registrations required across states, how the registration process works, and how Kintsugi manages registrations on your behalf.

What Is a Sales Tax Registration?

A sales tax registration is the process of applying for and obtaining a permit or certificate from a state tax authority that legally allows your business to collect sales tax from customers and remit it to the state.

You must be registered before you can legally collect sales tax. Collecting tax without a valid registration can result in penalties. Registrations are also required before Kintsugi can file returns on your behalf.

In-State vs. Out-of-State Registrations

Most states distinguish between in-state sellers (businesses with a physical location in the state) and out-of-state sellers (remote sellers without a physical presence). The registration type you need depends on whether your business has physical nexus in the state.

Registration Type	When It Applies
In-State / Sales Tax Permit	Your business has a physical location (office, store, warehouse) in the state
Out-of-State / Remote Seller	You have economic nexus or collected tax nexus but no physical location in the state
Simplified Sellers Use Tax (SSUT)	Available in Alabama for remote sellers; allows collection at a flat 8% rate instead of tracking variable local rates
Use Tax Account	Used in states like Michigan, Mississippi, and Missouri for remote sellers instead of a standard sales tax permit

📌 Note: Some states have distinct account types for in-state vs. out-of-state sellers. Filing under the wrong account type can trigger error letters from the state. Kintsugi selects the correct account type for each state during the registration process.

Tax Sourcing at Registration

When registering, the state will ask for your business address. This is important because it determines how tax is sourced for in-state transactions:

Destination-based states: Tax is always based on the buyer's address, regardless of your location
Origin-based states: Tax for intrastate sales is based on your registered business address
A full in-state address is always required, not just a ZIP code

Registration by State: Key Variations

While the general registration process is consistent, there are important state-specific differences to be aware of:

State	Registration Name	Key Notes
Alabama	Sales Tax / Sellers Use Tax / SSUT	Three distinct account types; out-of-state sellers choose between actual variable rates (SUT) or flat 8% (SSUT)
Arizona	Transaction Privilege Tax (TPT) License	Same license for in-state and remote sellers, but remote designation avoids separate local registration fees
California	Seller's Permit	Destination-based; all businesses use the same permit type
Illinois	Certificate of Registration	Origin-based; remote retailers file under Remote Retailers' Occupation Tax (ROT) designation
Kansas	Two Account Types	In-state: Retailers' Sales Tax (prefix 004); Out-of-state: Retailers' Compensating Use Tax (prefix 005). Filing under the wrong type triggers an error letter.
Louisiana	Three Account Types	Standard (physical presence), Direct Marketer (voluntary, flat 8.45%), or Remote Seller (mandatory with economic nexus)
Michigan	Two Account Types	Sales Tax Account for physical presence; Use Tax Account for remote sellers
Texas	Sales Tax Permit	Remote sellers may elect a simplified flat 1.75% local rate instead of tracking 1,500+ local jurisdictions
Washington	Business License (Excise Tax)	Registration through the Department of Revenue's Business Licensing Service
Hawaii	General Excise Tax (GET)	Hawaii uses a General Excise Tax rather than a traditional sales tax; standard rate is 4.0% plus a 0.5% county surcharge in most areas

How Kintsugi Handles Your Registrations

When Kintsugi identifies that you have nexus in a state and you approve a registration request, the Kintsugi team handles the application on your behalf. Here is what to expect:

Kintsugi identifies the correct registration type for your business (in-state or remote seller)
Kintsugi completes the registration application using your business information
Most states allow a future effective start date to be specified, so you are not required to file zero-dollar returns for periods before your nexus date
Once the permit is issued, your Sales Tax ID is recorded in Kintsugi and used for all subsequent filings

📌 Note: Alabama and Massachusetts process registrations nearly immediately, so Kintsugi coordinates registration timing carefully in those states to avoid premature filing obligations.

After Registration: Filing Frequencies

Once registered, states assign a filing frequency based on your estimated or actual sales volume. Common schedules are:

Monthly: For businesses with higher sales volumes
Quarterly: For mid-range sales volumes
Annually: For businesses with lower volumes

Filing frequency can change over time as your volume grows. Kintsugi tracks these schedules and files on time regardless of frequency.

Deregistration

If your business no longer meets nexus thresholds in a state, you can deregister your sales tax permit. Deregistration requirements vary by state and may include filing a final return, submitting zero-dollar returns for a trailing period, and formally closing your account with the state.

Kintsugi can assist with deregistration. Contact the support team to initiate the process.

Need Help?

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