What sales tax is
Sales tax is a state tax on sales to end customers, in many places topped up by county and city taxes. There is no federal sales tax. The seller has to calculate it, collect it and pay it over to the state.
So the obligation doesn't depend on being a US citizen: it applies to every business with nexus in a state. That business registers there, charges tax on taxable sales and files returns on a regular schedule.
When you need to register: nexus
Physical presence
An office, staff on the ground or a warehouse in the state creates nexus.
Economic presence (economic nexus)
On June 21, 2018, the Supreme Court ruled in South Dakota v. Wayfair that a state may require sales tax from sellers with no physical presence there. It expressly abandoned the old rule that hinged on physical presence. Since then, states have also tied the obligation to sales thresholds.
Every state sets its own thresholds and its own rules, for example on which sales count. We check whether you reach the threshold before registering.
States without a general sales tax
A few states levy no general statewide sales tax. That doesn't always mean sales there are tax-free:
- Alaska: no state sales tax, but many local governments levy their own. Sellers without a presence who make more than $100,000 a year in sales into Alaska must register with the Alaska Remote Seller Sales Tax Commission.
- Delaware: no sales tax, but a gross receipts tax that the seller pays on its gross receipts.
- Montana: no general sales tax.
- Oregon: no general sales tax.
Registration and ongoing filings
You register with the tax authority of each state, separately for every state. Procedures vary. In Texas, for example, you apply for the permit online and there's no fee, though the state may ask for a security deposit. In California the seller's permit is also free.
The state decides how often you file. Florida, for instance, sets the schedule by the tax you collect in a year: monthly above $1,000, quarterly from $501 to $1,000, semiannually from $101 to $500 and annually at $100 or less.
A return is due even if you sold nothing in the period. Texas, for example, expressly requires one even with no taxable sales.
Sales tax as an add-on service for your company
We don't offer sales tax on its own, only as an add-on for a company we form or look after in our annual package. We handle registration and ongoing filings together with our sales tax partner, a specialized US provider. You have one point of contact: us. No company yet? You could form a Wyoming LLC, for example, and book sales tax as an add-on at the same time.
Ongoing filings start once the state has set your filing period, and the fee follows that schedule.
With a new company
Forming your company with us? Then simply add sales tax as an add-on in the order form of your formation package. To see how the formation itself works, read our step-by-step guide to forming a US LLC.
See the formation packages →For your company in the annual package
Is your company already in our annual package? Then just add sales tax as an add-on.
Add sales tax to your annual package →Sales tax FAQ
Do I have to register everywhere I sell?
Only in states where you have nexus: through physical presence or because you reach the state's sales threshold. States without a general sales tax sometimes have other obligations, such as Alaska with its local taxes.
Can I book sales tax with you without a company?
No. With us, sales tax is an add-on to a company we form or look after in our annual package.
Who decides how often I have to file?
The state. Florida, for instance, sets the schedule by the amount of tax collected. Our fee for ongoing filings follows that schedule.
Do I have to file even if I sold nothing?
That depends on the state. Texas, for example, expressly requires a return even when there were no taxable sales in the period.
