Selling products online means you must understand sales tax compliance in various states. U.S. sales tax laws have become more complex, especially with remote selling and marketplace regulations.
What Is Sales Tax Nexus?
A “nexus” is a connection a business has with a state that triggers tax obligations. This could be physical (an office or inventory location) or economic (making a certain number of sales in that state).
Sales Tax Obligations
Once you have a nexus, you must register with that state’s tax authority, collect the correct rate from customers, and file returns on time.
Mistakes to Avoid
- Not registering in states where you have nexus
- Using incorrect tax rates
- Failing to file returns on time or pay owed tax
Tools to Help
Platforms like tax automation software help track nexus, calculate city and state tax, and automate filings saving you time and headaches.