Nexus is the qualifying criteria for a seller to be required to collect and pay taxes on sales in a state. Sales tax nexus establishes the connection between a taxing jurisdiction such as a state and an establishment such as your business. However, there isn’t necessarily a shared definition of nexus across the 50 states and the rules can change, and sometimes often. Read more here:

Nexus & Taxability (NexT)

Physical Vs. Economic Nexus: What’s The Difference And Why Does It Matter?

There isn’t necessarily a shared definition of nexus across the 50 states and the rules can change, and sometimes often. Consequently, a business must look at each state individually when determining sales tax nexus and must be attentive to the continuously changing regulations. Find more information utilizing our free state by state nexus risk calculator.

The State-By-State Nexus Risk Calculator

South Dakota v. Wayfair, Inc. is a 2018 U.S. Supreme Court decision that gives states the right to force out-of-state sellers to collect and remit sales tax, even if they do not have a physical presence in the taxing state.

Your Guide To The Biggest Court Decision In Sales Tax History

Revisiting Wayfair Vs. South Dakota Over 3 Years Later

This guide will take you through state-by-state, giving you the essential facts you need to quickly determine if you or your client may have either Physical or Economic Nexus (or both) in any given state.

In short, yes. States audit companies of all sizes. Even super small businesses who only sell in one state could have big problems if they aren’t aware of the tax consequences of their business and they are audited.

There are marketplace facilitator laws that currently require marketplace facilitators such as Amazon, Etsy, and others to collect and remit the sales tax in the sale of your items. So you shouldn't have to worry about sales tax as a seller on one of these marketplaces. But you will have to refer to your marketplace facilitator directly to know exactly to what extent they are handling your sales taxes.

For most businesses, getting compliant is an essential yet daunting task. Reviewing your situation and total liability is the first step towards compliance. Start out by asking yourself 3 questions.

1. Do I Have Nexus?
2. Is What I Sell Taxable?
3. Am I responsible for paying these taxes?

Don’t hesitate to contact a professional. At the end of the day, it all comes down to becoming educated on your own personal requirements, as everyone’s circumstances and state legislation differ. There is a lot of information to sift through and consider. Don’t let sales tax hold you and your business back from reaching full potential. Hop on to our completely free “What’s Next Call” where we can provide guidance, a second opinion if that's what you're needing, or answers to any other questions regarding sales tax and your online business. Let’s collaborate.

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