Sales Tax Compliance for Small Business: Multi-State Nexus Guide (2026)

Before 2018, you only collected sales tax in states where you had a physical presence. Then South Dakota v. Wayfair changed everything. Now you can owe sales tax in any of the 45 states with a sales tax — even if you've never stepped foot there.

Two kinds of nexus

Physical nexus — you have a connection to the state via:

• Office, warehouse, or store
• Employees or contractors residing there
• Inventory stored there (Amazon FBA: you have inventory in 30+ states)
• Trade show attendance, depending on state rules

Economic nexus — you cross a sales threshold in the state. The most common thresholds (post-Wayfair):

Threshold	Common In
$100,000 in sales OR 200 transactions	Most states (the "Wayfair-standard")
$500,000 in sales	California, New York, Texas
$250,000 in sales	Alabama, Mississippi

Sales Tax Institute's nexus chart is the reference.

Five states with NO sales tax (the NOMAD states)

• New Hampshire
• Oregon
• Montana
• Alaska (some local taxes)
• Delaware

If you only sell into these, you don't have a sales tax obligation. Most businesses sell across all 50.

What to do if you cross a threshold

1. Register with that state's Department of Revenue (online, free in most states)
2. Collect the correct rate at checkout — varies by state, county, city, and sometimes ZIP+4 (combined rates can exceed 10%)
3. Remit the collected tax — monthly, quarterly, or annually depending on volume
4. File sales tax returns even in months with zero sales (most states require this)

Failure to register/file can mean penalties of 10–25% of the tax owed plus interest, and in extreme cases, personal liability for owners.

Marketplace facilitator laws

Good news: if you sell on Amazon, Etsy, eBay, Walmart, or Shopify+ShopPay, those platforms are now legally responsible for collecting and remitting sales tax in nearly every state with sales tax — see Marketplace Facilitator laws.

You still have to register and file in some states, but the platform writes the check.

Software that makes this manageable

• TaxJar — automates calculation, filing, and remittance for ecommerce
• Avalara — enterprise-grade for higher-volume businesses
• Anrok — strong for SaaS companies
• Stripe Tax — built into Stripe checkout
• Quaderno — simpler, indie-friendly

Cost: $20–$200/month depending on transaction volume. Cheaper than a single state audit.

SaaS and digital products

Sales tax on SaaS is a moving target. As of 2026:

• Taxable: NY, TX, PA, WA, OH, AZ, MA, TN, ME, NM, NC, SD, UT, CT, IA, AL, RI
• Generally not taxable: CA, FL, IL, MI, NJ, MD, GA, IN, KY, LA, NV, OR, VA, WI

Check the Avalara SaaS taxability map for your specific state.

Use tax — the trap

If you buy something out-of-state for use in your home state and the seller didn't charge sales tax, your state usually wants "use tax" — the same rate, paid by you. Most states require you to self-report this on your annual income tax return.

How Accountaxed handles sales tax

Accountaxed tracks your collected sales tax as a Liability (until remitted) and your sales by state, so you can see where you're approaching nexus thresholds. For multi-state filing, we integrate with TaxJar and Avalara via CSV export.

See the sales-tax tracking → · For state-specific guidance, start with the Multistate Tax Commission and your state Department of Revenue.