Understanding Direct Pay Permits and Their Tax Benefits

Direct pay permits, which allow taxpayers to pay sales tax directly to the state rather than sellers, are becoming more common. Many businesses see direct pay as an essential element to the management of their state and local tax obligations, however there are still many questions. How do direct pay permits work and how are they best utilized?

Key Points:

1. Direct pay allows qualified buyers to pay taxes directly to the state comptroller rather than to the seller

2. Offering direct pay for customers can generate significant long-term tax savings

3. Holders of direct payment permits may issue blanket exemption certificates in lieu of paying taxes when purchasing, leasing or renting taxable items

On the latest “Weaver Beyond the Numbers,” host Tyler Kern talked to Weaver’s Mayur Naik, Partner, State and Local Tax Services and Shane Stewart, Partner-in-Charge, State and Local Tax Services to explored how direct pay can simplify sales taxes.

“It’s a mechanism that’s offered by a lot of the states that allows a taxpayer or purchaser to pay the tax directly to the state instead of paying to their vendor,” said Naik.

Naik added that once a system is in place, direct pay can generate significant tax savings, and a well-designed process can provide granular reporting about the tax status of each item purchased.

Stewart further explained there’s not enough knowledge surrounding direct pay and his goal has also been raising awareness. “Many businesses are not aware these programs exist. We’re just trying to get the word out, so taxpayers know that this is not burdensome. It’s not administratively challenging to maintain compliance in this space and there are professionals on our team who specialize in helping clients manage and fully utilize their direct pay permits,” said Stewart.

With Weaver’s experience in dealing with complicated state and local tax issues along with a deep understanding of the direct pay permitting and compliance process, the team is equipped to make sure your business is minimizing its tax liability.

Subscribe and listen to future episodes of Weaver: Beyond the Numbers on Apple Podcasts or Spotify.

Recent Episodes

Starting in 2026, The Marketing AI SparkCast alternates between the Marketing AI Pulse Monthly Brief and in-depth interviews with leading marketing AI innovators. This episode is the February 2026 edition of the Monthly Brief and focuses on trust and authenticity in an AI-driven world. Aby Varma and Matt Cyr explore the emergence of advertising inside…

The CFO seat is being rewritten in real time. Today’s finance leaders are expected to drive growth, lead enterprise-wide systems transformations, and shape AI strategy—while still keeping the close, controls, and capital story airtight. Gartner reports that 59% of finance leaders are already using AI in the finance function, underscoring how rapidly the role is…

Buying behavior has shifted dramatically. Today’s B2B customers do most of their research before ever speaking with a salesperson. In fact, 61% of B2B buyers say they prefer a rep-free buying experience, according to a 2025 Gartner survey. At the same time, U.S. retail e-commerce sales exceeded $1.192 trillion in 2024. Growth still depends…