So, your eCommerce business is booming. Orders are rolling in from across the country, and you’re feeling great until someone mentions multi-state sales tax compliance. Cue the panic.
Suddenly, you’re wondering:
Wait, I have to collect sales tax outside my home state?
Which states even require me to register?
What happens if I’ve been selling for months (or years) without collecting?
First, take a deep breath. You’re not alone. Many business owners don’t realize they need to collect and remit sales tax in other states until they’re already on the hook for it.
But here’s the good news: Sales tax compliance doesn’t have to be overwhelming. With the right automation tools and expert help from a CPA in Austin, Texas, you can stay compliant without losing sleep over tax laws.
Let’s break it down.
Why Multi-State Sales Tax Is So Confusing
1. The “Nexus” Trap (AKA Why States Want Your Money)
Nexus is a fancy tax word for “you owe us sales tax.” If you have nexus in a state, that state requires you to collect and remit sales tax.
How do you trigger nexus? There are three main ways:
- Physical Nexus – Having an office, warehouse, or even inventory stored in a state. (Yes, Amazon FBA counts!)
- Economic Nexus – Making $100K+ in sales or 200+ transactions in a state—even if you’ve never set foot there.
- Employee Nexus – Hiring a remote employee? Congrats, you might now owe payroll and sales tax in their state.
Example: A Texas-based eCommerce business that sells $120K worth of goods to California customers has economic nexus in California. That means they must register, collect, and pay California sales tax.
2. Every State Has Different Rules (Because, Of Course, They Do)
- Some states have a $100K threshold. Others require $500K.
- Some tax digital products. Others don’t.
- Some states have local tax rates on top of state taxes.
Keeping track of all this manually? Nope. Not happening.
3. Ignoring It Can Get Expensive Fast
If you owe sales tax but didn’t collect it, you’re still responsible for paying it. That means you’re covering taxes out of your own pocket plus interest and penalties.
And trust me, states will come knocking.
How to Stay Sales Tax Compliant (Without the Stress)
The secret to handling multi-state sales tax? Automate what you can and let experts handle the rest.
1. Use Sales Tax Automation Software
These tools track nexus, calculate taxes at checkout, and even file returns for you.
✔ Avalara – Ideal for businesses selling in multiple states with high-volume sales.
✔ TaxJar – Great for small businesses and eCommerce sellers.
✔ Shopify, Amazon, Etsy Integrations – Some platforms automatically collect tax for you (but not in all states).
Why It Works: These tools update tax rates automatically, so you’re never under-collecting or overcharging customers.
2. Work With a Sales Tax Pro Who Actually Gets It
Even with automation, sales tax can be tricky. That’s where a tax advisor in Austin can help.
At Insogna CPA, a leading CPA firm in Austin, Texas, we:
✔ Identify where you have sales tax nexus (so you don’t register unnecessarily).
✔ Ensure your sales tax filings are accurate and on time.
✔ Handle multi-state tax registrations so you don’t have to deal with government red tape.
Avoid Costly Sales Tax Mistakes, Let’s Handle It for You
Multi-state sales tax is complex, annoying, and constantly changing. But you don’t have to figure it out alone.
At Insogna CPA, a trusted Austin accounting service, we take care of:
- Sales tax automation setup (Avalara, TaxJar, Shopify, etc.)
- Multi-state tax registrations (so you’re compliant in the right places)
- Quarterly & annual sales tax filings (so you never miss a deadline)
Let’s make sales tax compliance easy. Book a consultation today!