When Do You Need To Register For Sales Tax
There are various rules around sales tax registration that vary by state, but as a general rule, businesses are required to register for sales tax once they’re engaged in business (which is typically defined by reaching a certain level of sales or transaction volume).
For example, in California you must register and collect sales tax once you exceed $500,000 in sales revenues from customers within the state. However, in Georgia, you must begin collecting sales tax once you exceed $100,000 in sales revenue OR complete 200 transactions from customers within the state.
The easiest way to understand your state’s requirements is to visit their department of revenue website and navigate to the ‘Sales and Use Tax’ section.
Businesses that sell goods or services online and ship them across state lines may also need to register for sales tax in the states where they have a significant customer base.
As a business owner in the US, It’s really important that you understand the sales tax rules in each state where you sell products or services to avoid any potential legal issues that may occur.