Why E-Commerce Sellers Should Prioritize Sales Tax Compliance – and How We Can Help
Published: September 19th, 2025
In the dynamic world of e-commerce, success isn’t just about selling great products – it’s also about staying compliant with essential regulations, like sales tax. If you run an online store, you may have wondered: Do I need to collect sales tax? What software can help me stay compliant? And finally, what should I look for when choosing a platform? Let’s break it down.
What is Sales Tax?
Sales tax is a consumption tax imposed by state and local governments on the sale of goods and certain services. In the United States, sales tax rates and rules vary by state – and even by city or county. Retailers are responsible for collecting sales tax at the point of sale and remitting it to the proper authorities.
Do E-Commerce Sellers Need to Collect Sales Tax?
Yes, many e-commerce sellers are required to collect sales tax if they have “nexus” in a particular state. Nexus is a legal term that indicates a sufficient connection to a state, and it can be triggered by and of the following:
- Physical presence: A warehouse, office or employees in the state
- Economic nexus: Exceeding a specific threshold of sales or transactions within the state (ex $100,000 in sales or 200 transactions) – this varies by state
- Affiliate nexus: Partnership with other businesses in the state
Understanding where you have nexus is crucial to knowing where you need to register, collect, and remit sales tax.
How Software Can Help with Sales Tax Compliance
Sales tax compliance can be complex, but software platforms like Shopify, WooCommerce, and others offer built-in tools to simplify the process. Shopify calculates sales tax based on customer location and generates reports that separate gross sales, taxable sales, and taxes collected.
When evaluating software, ecommerce sellers should consider the following:
- Automatic Tax Calculations: Does the software automatically apply the correct tax rates based on shipping destination?
- Nexus Tracking: Can the platform monitor your sales across states and notify you when you trigger nexus in a new state?
- Reporting Capabilities: Does it generate detailed reports that clearly separate taxable and non-taxable sales?
- Filing Assistance: Does the software offer support for filing returns, or integrate with services that do?
- User-friendly Interface: Can you easily navigate the platform and customize settings as needed?
Partner with Us for Your Sales Tax Needs
While software can help with calculations and reporting, you still need a knowledgeable partner to ensure you’re fully compliant. Our team specializes in ecommerce sales tax compliance solutions to help businesses navigate the complexities of sales tax. We provide expert guidance, assist with registration, and review software reports to ensure accuracy.
Don’t let sales tax compliance become an afterthought. Contact us today to learn how we can set your e-commerce business up for long-term success. We’re here to simplify the process so you can focus on growing your business with confidence.