Sales tax basics for online sellers
This is general orientation, not tax advice, sales tax rules are set state-by-state (and country-by-country) and change. Talk to a CPA about your specific situation, especially once you're selling across multiple states.
- Nexus is the trigger. You generally owe sales tax in a state once you have "nexus" there, either physical (you, an employee, or inventory is located there) or economic (you cross a sales/revenue threshold selling into that state, common thresholds are around $100k or 200 transactions/year, but this varies by state).
- Marketplace facilitator laws changed a lot of this. Etsy and Amazon collect and remit sales tax on your behalf in most U.S. states automatically, but you're still generally responsible for tracking and filing if you also sell direct (your own Shopify store, in-person, etc.).
- Registering before you have nexus can create filing obligations you don't need yet. Don't register in every state "just in case", register where you've actually crossed a threshold.
- Keep records regardless. Even where a marketplace collects tax for you, keep your own sales records, you'll need them at tax time and if a state ever asks.
- International sellers face an entirely separate set of VAT/GST rules per country, treat this as a distinct research task, not an extension of U.S. sales tax logic.