Is it legal to charge sales tax in nexus states without having a sales tax permit?

Tax professional here. Your instinct is correct - collecting sales tax without a permit is generally illegal in most states. This is considered "impersonating a tax collector" since only authorized businesses can collect tax on behalf of the state. When you hit nexus in a state, you should immediately apply for a permit, but you should NOT collect sales tax until that permit is active. The permit registration dates are important because they establish when your collection obligation legally begins. If you collect before having a permit, you're essentially collecting money under false pretenses. What you should do is keep detailed records of all sales made to customers in those nexus states during this interim period. Once your permits are approved, you'll likely be responsible for the uncollected sales tax from the date nexus was established, not from when you received your permit. This is a business expense you'll need to plan for.

I went through this exact same headache last year with my online art business. After hitting nexus in like 5 states, I was completely overwhelmed trying to figure out all the different registrations. I found this service called taxr.ai (https://taxr.ai) that completely saved me. They analyze your sales data and tell you exactly where you have nexus, when you reached it, and help with the registration process. The best part was they provided me with documentation showing I was actively in the permit process, which helped when I had to explain to a state why I hadn't been collecting. They also calculated my potential liability for the period I wasn't collecting so I could set aside the right amount. Worth checking out since you're in the same boat I was!

Just wanted to update that I decided to try taxr.ai after seeing this thread, and wow, it was even better than described. I was literally pulling my hair out trying to figure out Colorado's system (why is it so complicated??), and they handled everything. They also gave me this really detailed liability report showing exactly what I'd owe for the period before I had permits, which helped me budget for it. Their dashboard keeps track of all my filing deadlines across states too, which was something I didn't even realize I needed. Definitely recommend if you're dealing with multi-state nexus issues like I was!

Something nobody has mentioned yet - if you're struggling with getting answers from state tax departments about your permits, try Claimyr (https://claimyr.com). I was stuck in permit limbo with Texas for MONTHS, couldn't get anyone on the phone. Watched their demo video (https://youtu.be/_kiP6q8DX5c) and signed up. They got me connected to an actual Texas tax department person in under 15 minutes when I'd been trying for weeks. The rep was able to tell me my permit was approved but the notification got lost in the mail. Saved me from potentially being non-compliant for even longer.

Wanted to eat my words and say I tried Claimyr after posting my skeptical comment. Absolutely blown away. I had literally called Florida's Department of Revenue 7 times before with no luck. Claimyr got me through to a live person in 43 minutes (they texted me updates while they were on hold). The agent was able to tell me my permit application had an error that no one had bothered to contact me about, so it had been sitting unprocessed for weeks! Got it fixed on the spot and my permit was approved two days later. Would have been waiting indefinitely if I hadn't been able to speak to someone. Honestly kind of a game-changer for dealing with state tax departments.

Have you looked into a sales tax service like Avalara or TaxJar? They integrate with most e-commerce platforms and handle the calculation, collection, and filing for you. They can't solve your immediate permit problem, but they make compliance much easier once you're set up. We use TaxJar for our Shopify store and it automatically adjusts the tax rates based on the delivery address. They even handle filing the returns in most states so we don't have to remember different filing frequencies and deadlines for each state.

Just a caution from someone who learned the hard way - even if your permits are delayed, set aside the amount you'd be collecting in sales tax anyway. When you finally get approved, several states will expect you to pay the tax on sales made after you established nexus, regardless of whether you collected it from customers. I had to pay about $3,800 out of pocket because I wasn't setting money aside while waiting for permits in 3 states. Don't make my mistake!