When a seller registers for sales tax in a state or locality, the company is obtaining permission to collect sales taxes on sales it makes in the state or locality. After all, collecting sales taxes prior to obtaining a sales tax permit via registration can result in potential civil or criminal sanctions. On the other hand, once a seller obtains a sales tax permit, it has revealed itself to tax authorities and is obligated to comply with that state’s sales tax rules.
“Register for sales tax.” This simple sounding step should not be taken lightly or without some forethought. The act of registering for sales tax collection and reporting obligates a registrant to comply with sales tax rules in a given state or locality, indefinitely.