The Proven 10 Step Process to Register Your Sales Tax Permits

Your focus should be on growing your e-commerce business, not on the sales tax permit registration process.  There are several options to complete your sales tax permit registrations. Those include filing for permits on your own, hiring your CPA, as well as going through an online service. The key is to have enough information to be able to evaluate what service is best for your situation. Below are the steps in our process as well as costly mistakes to avoid when it comes to sales tax permit registration. These proven steps come from our experience from applying for thousands of permits over the last four years. We have perfected the process (even with all the states changes). 

Our sales tax registration process will take you through the steps to be able to collect and remit sales tax. We have outlined said steps in a simple, easy to follow the video below. The overview will help you effectively go through this process and get back to selling online and generating profits.

The Top Costly Sales Tax Permit Registration Application Mistakes to Avoid:

  1. Online Advice. Relying on what someone else in a Facebook group did in order to apply for a Sales Tax Permit is likely to lead you in the wrong direction and potentially cause costly mistakes. It’s simply not worth following leads without a legitimate basis and dealing with the possibility of monetary penalties or being accused of sales tax evasion. Even tax attorney’s who are not familiar with FBA may often only beware of the changes since June 2018, not all the states sales tax FBA concerns prior.
  2. Inaccurate Applications. Submitting a sales tax application online or via a PDF with mistakes, incomplete information, or missing documentation are crucial errors that will cause delays to your application process up to 1 or 2 months, costing you unnecessary financial penalties with interest.
  3. International Applicants without a Social Security Number. Not knowing how to submit an application without a U.S. Social Security Number (SSN) will most certainly cause delays, especially for overseas Amazon FBA Sellers. We can help you fill out and file your applications right the first time. Update: some states require you have an ITIN. We do have a separate referral resource, but this process may take several months to receive an ITIN from the IRS.
  4. When To File, When Not To File. Not knowing which states to file right away, or which states require a waiting period when applying for sales permits can cause unnecessary issues that could be easily avoided with professional help. This is much more complex now since the Wayfair vs. South Dakota case in 2018. You have to evaluate, physical nexus, economic, notice and reporting and marketplace facilitator in several states and the different thresholds for each category, if at all. We have all the details you need in Sales Tax System to determine which factors to evaluate and which states to register for first. Don’t want to figure this out on your own? We have other services to do this part for you. Committing fraud with the wrong start date may result not only in 50% fraud penalties, but a felony in some states (you would be surprised how often this is recommended).
  5. Using Your Address when Applying. States do not recognize international shipping rates and foreign addresses in their systems. It may take up to 2 months to receive a completed mailed application. If you do not receive it at your foreign address, this will delay your ability to collect sales tax. Even U.S. sellers will receive “buckets of mail” and the time to sort through all the mail to your address will most likely lead to delays and more fees. Some promoters “overpromising” by saying let us apply for your permits and you may also use our address. An efficient mail scanning and sorting service require dozens of hours (and a team) to assemble, manage and maintain weekly. We know because this is what we have done with our virtual mail and scanning service. If the promoter does not even have a separate marketing piece to outline the mail, costs, process… they are simple overpromising and will not be able to keep up, costing you time and money.
  6. Foreign Registration/Qualification Mistakes. Not knowing which U.S. states require entities in the U.S. or internationally to register/qualify in a state before or after you register for permits will lead to unwelcome surprises down the road. This will cost a fortune in time and money to determine each state and what they require before and after you apply (and it changes).
  7. Forgetting/Not Knowing To Open Tax Accounts. You will need tax accounts opened in order to remit sales tax to each state’s Department of Revenue. Some states do this automatically, others require multiple steps that you need to make sure you get correct or your mistakes could lead to numerous problems in the near future.

Our Complete 8-Step Sales Tax Permit Registration Process:

Sales Tax System's 8-Step Permit Registration Process

Sales Tax System’s 8-Step Permit Registration Process

  1. Complete our Sales Tax Permit Service Agreement
    Initial and sign that you understand the terms, process, and time frames for our team to register for your permits.
  2. Complete our Sales Tax Registration Application
    You will receive our online sales tax registration application via a secure (SSL) online link.  Comprehensive video training Including; sales/use tax nexus examples [1], nexus start date, estimated monthly sales, and ownership and tax status.  Our sales tax application autofills all state applications to increase processing speed.[2]
  3. Sales Tax Registration Application Comprehensive Review
    Once the application is reviewed (within 48 hours), you will receive an email with the additional information that may be required. Our team reviews key points including; the accuracy of entity and ownership information, start dates, state sales levels, and key documents required. Details are provided if additional information is required by each state.  Our team will follow up if a state requires foreign registration before your sales tax permit registration. The fees for foreign registration (if required), are separate.
  4. Payment of the Additional Fees
    Once the sales tax application review is completed, you will receive an email with an itemization of any state (and city) fees, or mailing fees if required, plus a payment link.
  5. Preparation for Registration
    Before we apply for your chosen sales tax permits, our team of experts will complete any extra steps that are required.  This includes setting up a secure cloud folder for state filings.  Your folder will contain the documents from the state permit registrations and a sales tax summary spreadsheet.  It contains the permit numbers, login details, confirmation codes & numbers, filing frequency, additional information per state, and other important permit information.
  6. Sales Tax Registrations
    Our team will prudently submit and track your applications to your selected states, both online and by mail/fax.  The online application process requires creating a tax remitting and/or registration account which our team will do for you.[3]  We will organize all your login details and save them in a secure LastPass login which will save all your login details for easy access.[4] Any applications that require a paper application (typically when an SSN or ITIN is not present for the signer) our team will prepare, review and mail paper sales tax applications.  Our team will let you sign those forms and we will either mail it or fax, (if allowed in a state) to the respective state departments.
  7. Follow-up on Your Registrations
    Our team will call the states for pending items regarding your registrations as required or any additional steps to complete the registration (especially those applications that are mailed).  Our team will link the tax registration to the tax remitting accounts. Since the registration process differs with each state (as mentioned in step 6, there are states that have two accounts to open – registration account & remitting account), our team will link those two accounts to complete the registration. Linking accounts require the permit number and confirmation codes.
  8. Finalize & Provide Records
    Our team will update any changes to your logins, including the specific email we set up to speed up the process of authenticating before we finish the process. Our team will update any changes to your login details in your LastPass shared folder and update your summary spreadsheet with state permits.

You will receive a list of the states that require any next steps, and any states that require foreign qualification after applying for your permits.[5]

[1] One of the important factors in permit registrations is to determine when you first triggered sales/use tax nexus in each state. This involves reviewing Physical Nexus, Economic Nexus, Notice & Reporting, and Marketplace Facilitator States. Don’t want to determine this part yourself? We do have sales tax nexus services.
[2] By completing our Sales Tax General Application, all the information on the form will be merged into each application for every state you selected on the general form. This process is mostly used when mailing an application to the state is required.
[3] In some states there will be two accounts to register – once for the actual permit application and another for tax remitting. There are applications that require a two-factor authentication before registration, which slows down the process. Our team will set up a specific email to speed up the process of authentication.
[4] LastPass is a password manager that stores encrypted passwords online.
[5] Foreign registration services, if required, are separate.

 

Important FAQs:

Q: What is your Time Frame to Apply for Permits?

A: The time frame in which you will receive your permits will vary from state to state, anywhere from 3 business days to 8 weeks after you have submitted completed applications and you have approved our Next Step Documents. 

Q: What Support Will I Receive?

A: If you have any questions about the sales tax application process, email correspondence regarding the process is included in our low per state service fee. If you have questions about being behind on sales tax, what you may owe, your best strategy moving forward, etc., we offer paid consulting sessions that are not included in our permit service fee and require an additional charge.

Q: What Additional Steps are Required After You Apply for My Sales Tax Permits?

A: Our Next Steps Document, outlines the states that require additional steps after you apply for sales tax permits including foreign qualification if an entity. Sales Tax System has an update for each state with the state tax returns that are required in many states annually.

Don’t have time to register for your own sales tax permits? Learn more about your best options when registering for sales tax permit registration.

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