Q: When do I need to register to collect sales tax?
A: A seller is required to collect sales when they have a link or connection to a state, called nexus, and what they sell is taxable. This link or connection can be caused by many activities and may either be physical or economic. Some common physical activities that can create nexus are: are having inventory in a warehouse including an Amazon warehouse, utilizing independent or subcontractors in a state, having employees in a state, having employees or third-parties travel into a state on your behalf, having an affiliate program in the state, and advertising in local media. These are just a few activities that can create a physical nexus. An economic nexus can be created when you cross a certain amount of sales. This level is called a threshold. The most common economic nexus thresholds are $100,000 or 200 transactions, although there are many deviations. Some state have notice and reporting requirement thresholds which are much lower. For example OK, PA & WA all have $10,000 thresholds. You may find charts with thresholds and effective dates for both economic nexus and notice and reporting requirements in our resource section under charts and matrices.
Q: Do I need to register with the Secretary of State when registering for sales tax?
A: In general if you are registering as a remote seller to collect sales tax there is no requirement to register with the Secretary of State (SOS). However many states make it look like it's required. In most states, there is a way to bypass this option and if you're registering with the SOS you have probably made a mistake.
Q: Do I need a registered agent when registering for sales tax?
A: No. Registered agents are generally associated with registering with the Secretary of State.
Q. Why would I be registered for a retailer use tax rather than sales tax.
A: In any state that makes a distinction between a retailer use tax and a sales tax, a sales tax is usually only an option when you have a brick & mortar location in a state. Technically all sales that cross a state line are a use tax and not a sales tax. In some states, this use tax which is collected by the seller is called a vendor use tax or seller use tax.
Q. Does registration for sales tax create income tax nexus?.
A: No. Registering for sales tax does not create nexus for income tax. Your either have or don’t have income tax nexus based on your activities.