{"id":27916,"date":"2026-08-04T07:15:17","date_gmt":"2026-08-04T07:15:17","guid":{"rendered":"https:\/\/academy.siteground.com\/en\/?p=27916"},"modified":"2026-08-10T13:58:46","modified_gmt":"2026-08-10T13:58:46","slug":"ecommerce-sales-tax","status":"publish","type":"post","link":"https:\/\/academy.siteground.com\/en\/ecommerce-sales-tax\/","title":{"rendered":"Ecommerce sales tax: How to know if you owe it, register, and collect correctly"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Too often, online sellers discover their US sales tax obligations the same way: a notice from a state revenue department, or a tax season conversation that turns uncomfortable fast. It doesn&#8217;t help that the rules changed significantly in 2018. Now you can owe in states where you&#8217;ve never set foot, based purely on how much you sell there. <strong>Here&#8217;s how to figure out where you owe, what to do about it, and how to get your store set up before it becomes a problem.<\/strong><\/p>\n\n\n\n<div class=\"post-page__colored-blocks post-page__colored-blocks--update\"><h3 class=\"title title--regular title--size-medium title--weight-bold color-darkest\">Key takeaways:<\/h3><ul class=\"text text--size-medium color-darkest\" style=\"margin:0;padding-left:20px\"><li>Sales tax obligation is triggered by nexus \u2014 either a physical presence or sufficient sales volume in a state. You don&#8217;t have to be physically located there to owe it.<\/li><li>The rate you charge depends on what you sell and where your customer is \u2014 except in origin-based nexus states, where it depends on where your store is instead. It&#8217;s not a flat number \u2014 rates vary by state, county, and city, and some product categories are exempt entirely.<\/li><li>Whether you sell through a marketplace or your own store changes who&#8217;s responsible for collecting. Marketplaces typically handle tax collection for their platform under marketplace facilitator laws, but at the cost of margin, customer ownership, and control (though exceptions exist). Your own store puts the responsibility on you, but keeps everything else in your hands.<\/li><li>Filing and remittance is ongoing \u2014 but most of it can be automated or handed off. Stripe Tax handles calculation and nexus monitoring. An accountant can take care of the rest. The upfront setup is the part that needs your attention.<\/li><\/ul><\/div>\n\n\n\n<div class=\"post-page__colored-blocks post-page__colored-blocks--update\"><p class=\"text text--size-medium color-darkest\"><strong>A note before we start<\/strong><br>We\u2019re about to unpack a lot of tax info, and it can easily feel like a lot. But before the overwhelm, keep in mind that <strong>SO much of this can easily be managed by your ecommerce platform, payment gateway, and a reliable accountant.<\/strong> Jump ahead to the \u201c<a href=\"https:\/\/academy.siteground.com\/en\/ecommerce-sales-tax\/#how-to-configure-sales-tax-in-your-ecommerce-store\" data-type=\"link\" data-id=\"https:\/\/academy.siteground.com\/en\/ecommerce-sales-tax\/#how-to-configure-sales-tax-in-your-ecommerce-store\">How to configure sales tax in your ecommerce store<\/a>\u201d section if you want quick answers on how to make this all a lot easier.<\/p><\/div>\n\n\n\n<h2 id=\"h-do-you-need-to-collect-online-sales-tax-for-your-store\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"do-you-need-to-collect-online-sales-tax-for-your-store\"><\/span>Do you need to collect online sales tax for your store?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The answer <strong>depends on whether your store has &#8220;nexus&#8221; in a given state<\/strong>. If you do, you&#8217;re required to register there, collect the correct rate on every applicable sale, and file periodic returns. Stay below the threshold and you have no obligation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before 2018, nexus almost always meant a physical presence. Since then, <strong>selling enough to customers in a state is enough, regardless of physical presence<\/strong>. If you run an online business that <a href=\"https:\/\/academy.siteground.com\/en\/shipping-methods-for-online-stores\" data-type=\"post\" data-id=\"27295\" target=\"_blank\" rel=\"noopener\">ships<\/a> across the US, you may very well have obligations in more than one state.<\/p>\n\n\n\n<div class=\"post-page__colored-blocks post-page__colored-blocks--update\"><p class=\"text text--size-medium color-darkest\"><strong>Based outside the US, or selling to international customers?<\/strong><br>This article covers US sales tax specifically. If you&#8217;re doing <a href=\"https:\/\/academy.siteground.com\/en\/what-is-ecommerce\" data-type=\"post\" data-id=\"27244\" target=\"_blank\" rel=\"noopener\">ecommerce<\/a> in the EU, UK, Canada, or Australia, those markets operate under VAT and GST \u2014 <strong>different systems with their own rules, registration thresholds and filing requirements<\/strong>. SiteGround Ecommerce, for example, handles VAT and GST through the same tax management tools, but the rules themselves are outside the scope of this guide.<\/p><\/div>\n\n\n\n<h3 id=\"h-what-is-sales-tax-nexus\" class=\"wp-block-heading\"><strong>What is sales tax nexus?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Nexus is <strong>the legal connection between your business and a state<\/strong>. It&#8217;s the threshold that determines whether a state can require you to collect sales tax. Once you have it, you must register, collect the correct rate, and remit what you&#8217;ve collected on a regular schedule. There are two types:<\/p>\n\n\n\n<h4 id=\"h-physical-nexus\" class=\"wp-block-heading\"><strong>Physical nexus<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Physical nexus has existed as long as sales tax has. <strong>If your business has a warehouse, office, store, or employees in a state, you generally have nexus there<\/strong>, though the exact rules vary, so verify with the relevant state&#8217;s tax authority. This can include remote employees and third-party fulfillment centers, so check where your inventory is physically stored, especially if you use fulfillment services. <strong>Nexus often follows the inventory, not just the address on your business registration<\/strong>. For example, if you use Amazon FBA and your stock sits in an Amazon warehouse in Texas \u2014 surprise! \u2014 you may have physical nexus in Texas.<\/p>\n\n\n\n<h4 id=\"h-economic-nexus-what-changed-after-south-dakota-v-wayfair\" class=\"wp-block-heading\"><strong>Economic nexus \u2014 what changed after South Dakota v. Wayfair<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">In 2018, the US Supreme Court ruled in <em>South Dakota v. Wayfair<\/em> that states could require out-of-state sellers to collect sales tax based on sales volume alone, without physical presence. Within two years, every US state with a sales tax had enacted economic nexus laws.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before Wayfair, an online seller based in California could ship to customers in New York, Texas, and Florida and owe nothing in any of those states unless they had a physical footprint there. That&#8217;s no longer the case. <strong>Cross a state&#8217;s threshold and you&#8217;re obligated<\/strong>, even if your entire operation runs out of a spare bedroom in a different state.<\/p>\n\n\n\n<h4 id=\"h-economic-nexus-thresholds-by-state\" class=\"wp-block-heading\"><strong>Economic nexus thresholds by state<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The <strong>most common threshold is $100,000 in sales or 200 transactions to customers in a state during the current\/previous calendar year or a 12-month period<\/strong>. In most states, hitting either trigger creates nexus \u2014 you don&#8217;t have to hit both. A handful of states require both thresholds to be met, so check the specific rules for each state you sell into.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some states have moved away from the transaction count and now use sales-only thresholds, and a few set significantly higher bars. <strong>For current figures, the <a href=\"https:\/\/www.salestaxinstitute.com\/resources\/economic-nexus-state-guide\" target=\"_blank\" rel=\"noopener nofollow\">Sales Tax Institute&#8217;s state-by-state guide<\/a> is updated regularly<\/strong>. States vary in how they measure the threshold period \u2014 some use a rolling 12 months, others look at the current or previous calendar year. Check your specific state&#8217;s rules to know when your obligation kicks in.<\/p>\n\n\n\n<h4 id=\"h-states-with-no-sales-tax\" class=\"wp-block-heading\"><strong>States with no sales tax<\/strong><\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Currently <strong>five states have no statewide sales tax<\/strong>: Alaska, Delaware, Montana, New Hampshire, and Oregon. Sellers who only ship to customers in those states have no state-level sales tax obligation, though tax laws change \u2014 confirm current rules before drawing conclusions. Worth noting: some Alaskan localities do charge local taxes even without a state-level one, so Alaska isn&#8217;t entirely off the hook for every transaction. Also highly probable you aren\u2019t selling extensively to a random locality in Alaska.<\/p>\n\n\n\n<h2 id=\"h-how-to-check-if-you-have-nexus-in-a-state-right-now\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how-to-check-if-you-have-nexus-in-a-state-right-now\"><\/span>How to check if you have nexus in a state right now<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"https:\/\/www.siteground.com\/kb\/export-orders\" target=\"_blank\" rel=\"noopener\">Export order data<\/a> from the last 12 months<\/strong> (or current\/prior calendar year, depending on the state&#8217;s rules) and group it by the state the order shipped to. For each state, <strong>calculate your total sales and transaction count, then compare to that state&#8217;s threshold<\/strong> \u2014 keeping in mind that states differ on whether gross sales, taxable sales, or exempt sales count toward nexus. <strong>Check the state&#8217;s Department of Revenue<\/strong> for the exact definition before drawing conclusions.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"838\" height=\"580\" src=\"https:\/\/academy.siteground.com\/en\/wp-content\/uploads\/sites\/2\/2026\/08\/example-list-of-exported-orders-for-ecommerce-sales-tax.jpg\" alt=\"example list of exported orders for ecommerce sales tax\" class=\"wp-image-27914\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>If either number exceeds the threshold, you likely have economic nexus there and should consult your tax advisor about next steps.<\/strong> If you&#8217;re close to the threshold in a few states, monitor those going forward, as you can cross mid-year without realizing it until later.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">States to pay particular attention to: any state where you&#8217;ve recently started selling more aggressively. New <a href=\"https:\/\/academy.siteground.com\/en\/ecommerce-marketing\" data-type=\"post\" data-id=\"26136\" target=\"_blank\" rel=\"noopener\">ecommerce marketing<\/a> campaigns, wholesale accounts, or marketplace listings can push your sales into nexus territory in a state faster than you&#8217;d expect.<\/p>\n\n\n\n<h2 id=\"h-how-to-register-for-a-sales-tax-permit\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how-to-register-for-a-sales-tax-permit\"><\/span>How to register for a sales tax permit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Once you&#8217;ve confirmed nexus in a state, you need to<strong> register for a sales tax permit in that state <\/strong>(the name varies by state \u2014 seller&#8217;s permit, vendor&#8217;s license, and others). Indeed, collecting without a permit is generally considered a compliance violation.&nbsp;<\/p>\n\n\n\n<h3 id=\"h-where-and-how-to-register\" class=\"wp-block-heading\">Where and how to register<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Every state lets you register online through its Department of Revenue or Department of Taxation. The process varies, but you&#8217;ll typically need:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your business&#8217;s legal name and address<\/li>\n\n\n\n<li>Federal Employer Identification Number (EIN), or Social Security Number for sole proprietors<\/li>\n\n\n\n<li>Business structure (LLC, corporation, sole proprietor)<\/li>\n\n\n\n<li>A description of what you sell<\/li>\n\n\n\n<li>Your projected monthly or annual sales volume to that state<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Even better, the <a href=\"https:\/\/www.streamlinedsalestax.org\/\" target=\"_blank\" rel=\"noopener nofollow\">Streamlined Sales Tax Registration System (SSTRS)<\/a> lets you <strong>register in multiple states simultaneously<\/strong>, which is particularly useful if you&#8217;ve crossed thresholds in several states at once. Not every state participates, but many do, making it considerably less of a pain than doing each state individually.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Also good news: registration is usually free (although a few states charge a small fee).<\/p>\n\n\n\n<h3 id=\"h-what-happens-after-you-register\" class=\"wp-block-heading\">What happens after you register<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Once you&#8217;re registered, you&#8217;ll receive a sales tax permit number and a start date for collection. From that date forward, you&#8217;ll generally be <strong>required to collect sales tax on applicable sales in that state<\/strong>, so check your permit documentation for the exact terms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most states also <strong>assign a filing frequency at registration <\/strong>(monthly, quarterly, or annually) based on your projected sales volume. Higher volume means more frequent filings. You can usually request a change if your volume shifts significantly after registration. Make note of your assigned frequency: missing a filing deadline triggers penalties and interest in most states, even if the tax was already collected.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Pro tip: <\/strong>If this is starting to feel like a part-time job, that&#8217;s because for multi-state sellers it can be. <strong>Most small business accountants are comfortable handling sales tax registration, filing, and remittance<\/strong> \u2014 and handing it off is often worth it so you can focus on actually running your business rather than avoiding possible tax nightmares.&nbsp;<\/p>\n\n\n\n<h2 id=\"h-what-determines-how-much-tax-you-owe\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-determines-how-much-tax-you-owe\"><\/span>What determines how much tax you owe<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Sales tax <strong>isn&#8217;t a flat percentage<\/strong> (if only it were so easy!). The rate that applies to a given sale depends on which state&#8217;s rules govern the transaction and what you&#8217;re selling: some products are fully taxable, some are exempt, and some qualify for reduced rates.<\/p>\n\n\n\n<h3 id=\"h-origin-based-vs-destination-based-states\" class=\"wp-block-heading\">Origin-based vs. destination-based states<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Nexus tells you whether you&#8217;re required to collect in a state. Origin vs. destination tells you which rate to charge once you are.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Origin-based states<\/strong> apply the rate from where the seller is located. If your business is in Arizona and you sell to a buyer anywhere in Arizona, you charge your business address&#8217;s rate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Destination-based states<\/strong> apply the rate based on where the buyer is. This is most US states. A sale to a customer in a given city might be subject to the state rate plus a county rate plus a local rate, all stacked together. The rate changes with every order based on the buyer&#8217;s exact address.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For out-of-state sales, destination-based sales tax rules almost always apply. That means the effective rate is different for every order, which is one of the main reasons automated tax tools exist.<\/p>\n\n\n\n<h3 id=\"h-product-taxability-what-is-and-isn-t-taxable\" class=\"wp-block-heading\">Product taxability \u2014 what is and isn&#8217;t taxable<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Even once you have nexus in a state and know the rate, <strong>not every product you sell is taxable<\/strong>. Taxability rules vary significantly by state and product category, so what&#8217;s exempt in one state may be fully taxable in another, and rules change over time. Common categories that often have exemptions or special treatment include groceries, medications, clothing, and resale goods, but the specifics differ by jurisdiction and can shift with new legislation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Check the current taxability rules in each state where you have nexus, no matter what you sell.<\/strong> This is especially important for the categories above, since taxability differs the most there.&nbsp; Getting this wrong in either direction is a problem: under-collecting leaves you liable, over-collecting creates refund obligations you may not even know you have.<\/p>\n\n\n\n<h2 id=\"h-how-your-platform-affects-tax-collection\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how-your-platform-affects-tax-collection\"><\/span>How your platform affects tax collection<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Whether your ecommerce store lives on a marketplace or your own domain changes who&#8217;s responsible for collecting tax, and by how much.<\/p>\n\n\n\n<h3 id=\"h-selling-through-a-marketplace\" class=\"wp-block-heading\">Selling through a marketplace<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you sell through Amazon, Etsy, eBay, or similar marketplaces, <strong>those platforms are required by law to collect and remit sales tax on your behalf<\/strong>. Every US state with a sales tax has enacted marketplace facilitator laws since 2019. That said, the specifics of marketplace facilitator laws vary by state and evolve over time, so verify the current rules in each state where you have nexus.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sounds like an easy solve, but a few caveats exist:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Sales through your own website are not covered.<\/strong> Marketplace facilitator laws apply to sales made through the marketplace, and not if you\u2019ve <a href=\"https:\/\/academy.siteground.com\/en\/how-to-create-ecommerce-website\" data-type=\"post\" data-id=\"15744\" target=\"_blank\" rel=\"noopener\">created your own ecommerce website<\/a>. Those are always your responsibility.<\/li>\n\n\n\n<li><strong>Marketplace sales can still count toward your nexus threshold.<\/strong> In many states, your Amazon or Etsy sales count toward the economic nexus calculation even though the marketplace handled the tax. Marketplace sales pushing you over a state&#8217;s threshold means you need to register and collect for your direct store there too.<\/li>\n\n\n\n<li><strong>You may still need to report marketplace sales on your state returns.<\/strong> Some states require marketplace-facilitated sales as a line item on your return, even as zero-tax transactions. Check the specific state&#8217;s requirements when you register.<\/li>\n\n\n\n<li><strong>The convenience comes with tradeoffs.<\/strong> The tax handling is one of several things a marketplace manages for you, alongside fees that cut into your margin, a customer relationship that belongs to the platform, and policies you don&#8217;t control. For some sellers that&#8217;s the right trade. For others, a direct store is worth the added responsibility because it means keeping the margin and owning the customer.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-running-your-own-store\" class=\"wp-block-heading\">Running your own store<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you run your own store, there&#8217;s no platform absorbing the tax obligation. <strong>You need to configure collection yourself. Thankfully, though, this is a whole lot more straightforward than it sounds.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are three main approaches:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Manual rate configuration<\/strong> is the baseline. You add each state where you&#8217;re registered, enter the applicable rates, and the platform applies them at checkout. It works, but requires you to stay current as rates change. Fine for a small number of states; increasingly fragile as you scale.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Stripe Tax<\/strong> is a paid service from Stripe \u2014 one of the most widely used payment processors for online businesses, alongside PayPal. While both handle <a href=\"https:\/\/academy.siteground.com\/en\/how-to-accept-payments-online\" data-type=\"post\" data-id=\"15781\" target=\"_blank\" rel=\"noopener\">accepting payments<\/a>, Stripe Tax calculates the correct rate in real time, monitors your sales volume by state, and alerts you when you&#8217;re approaching a nexus threshold.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Dedicated compliance services<\/strong> go further. In addition to calculation, they handle filing and remittance on your behalf. Worth evaluating if you want to fully hand off the periodic returns.<\/p>\n\n\n\n<h2 id=\"h-how-to-configure-sales-tax-in-your-ecommerce-store\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how-to-configure-sales-tax-in-your-ecommerce-store\"><\/span>How to configure sales tax in your ecommerce store<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">How you set this up depends on how your store is built.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>If you&#8217;re on an ecommerce platform<\/strong>, you&#8217;ll typically have two built-in options.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1. With SiteGround, for example, the<strong> <a href=\"https:\/\/www.siteground.com\/kb\/add-basic-tax-setup-registration\/\" target=\"_blank\" rel=\"noopener\"><em>Basic Tax Setup<\/em><\/a> uses predefined rates <\/strong>(that may also be customized) for the US, Canada, the EU, the UK, and Australia, with <a href=\"https:\/\/www.siteground.com\/kb\/tax-calculation-checkout\" target=\"_blank\" rel=\"noopener\">tax applied at checkout<\/a>. For any other countries, you set rates manually. Functionality varies by platform, though, so be sure to check what your platform includes and whether the rates can be customized.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"2860\" height=\"1326\" src=\"https:\/\/academy.siteground.com\/en\/wp-content\/uploads\/sites\/2\/2026\/08\/Choosing-configuration-of-the-Basic-Tax-Setup-with-SiteGround-Ecommerce.jpg\" alt=\"Choosing configuration of the Basic Tax Setup with SiteGround Ecommerce\" class=\"wp-image-27913\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">2. <strong><a href=\"https:\/\/www.siteground.com\/kb\/advanced-tax-setup\/\" target=\"_blank\" rel=\"noopener\"><em>The Advanced Tax Setup with Stripe<\/em><\/a>, on the other hand, connects directly to your store and handles real-time rate calculation<\/strong>, nexus threshold monitoring, and automatic alerts when you&#8217;re approaching a new state obligation.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"595\" src=\"https:\/\/academy.siteground.com\/en\/wp-content\/uploads\/sites\/2\/2026\/08\/Backend-of-SiteGround-Ecommerce-where-you-can-connect-different-payment-methods-for-your-customers-including-Stripe-which-offers-Advanced-Tax-Setup.jpg\" alt=\"Backend of SiteGround Ecommerce where you can connect different payment methods for your customers including Stripe which offers Advanced Tax Setup\" class=\"wp-image-27912\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>If your store is custom-built<\/strong>, Stripe Tax is the most common path. It integrates directly and doesn&#8217;t require an ecommerce platform.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Either way, product tax codes are where most configuration errors happen. A miscategorized product gets taxed incorrectly on every order in every state: <a href=\"https:\/\/www.siteground.com\/kb\/assign-product-tax-class\" target=\"_blank\" rel=\"noopener\">assign the correct tax code to each product<\/a> before you go live, and <a href=\"https:\/\/www.siteground.com\/kb\/manage-tax-overrides\" target=\"_blank\" rel=\"noopener\">manage any overrides<\/a> for category exemptions.<\/p>\n\n\n\n<div class=\"post-page__colored-blocks post-page__colored-blocks--update\"><p class=\"text text--size-medium color-darkest\"><strong>Want tax configuration handled out of the box?<\/strong><br><a href=\"https:\/\/www.siteground.com\/ecommerce\" target=\"_blank\" rel=\"noopener\">SiteGround Ecommerce<\/a> includes Basic Tax Setup free on all plans, with predefined rates for the US, Canada, the EU, the UK, and Australia, with no per-transaction fees or monthly caps. For more complex needs, the Advanced Tax Setup with Stripe is a few clicks away. Trusted by 3 million domain owners, rated 4.9\/5 on Trustpilot. Try it free for 14 days \u2014 no credit card required.<\/p><\/div>\n\n\n\n<h2 id=\"h-online-business-sales-tax-compliance-how-to-file-and-remit\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"online-business-sales-tax-compliance-how-to-file-and-remit\"><\/span>Online business sales tax compliance: how to file and remit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Registering and collecting is only part of the picture: there\u2019s that finicky part of actually paying sales tax. Sigh. That translates to <strong>filing returns and remitting the tax you&#8217;ve collected to each state on a regular schedule<\/strong>. If you\u2019re <a href=\"https:\/\/academy.siteground.com\/en\/how-to-sell-online\" data-type=\"post\" data-id=\"27250\" target=\"_blank\" rel=\"noopener\">selling online<\/a> in multiple states, this is where compliance can get administratively intense.<\/p>\n\n\n\n<h3 id=\"h-filing-frequency-by-state\" class=\"wp-block-heading\">Filing frequency by state<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Your filing frequency is assigned at registration<\/strong> based on your sales volume in that state. Most small sellers file sales tax quarterly or annually. Higher-volume sellers may be required to file monthly. The frequency can be found in your registration confirmation, online tax portal, or seller tax account information.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Missing a deadline carries penalties in most states,<\/strong> plus interest that accrues over time. Note that missing the filing is penalized separately from missing the payment, so don&#8217;t assume that paying sales tax without filing satisfies the requirement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Keep a filing calendar\u2026or hand this piece off to your accountant.<\/strong> List every state where you&#8217;re registered, your assigned frequency, and each state&#8217;s deadline. The deadlines are not uniform: some states require returns by the 20th of the month following the period, others by the last day, and some by the first. One missed deadline in a state with a monthly filing schedule can turn into a multi-penalty situation quickly. If you&#8217;re already working with a bookkeeper or accountant, this is exactly the kind of ongoing administrative work worth delegating.<\/p>\n\n\n\n<h3 id=\"h-how-to-avoid-common-filing-mistakes\" class=\"wp-block-heading\">How to avoid common filing mistakes<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The most common errors in online business sales tax compliance:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Reporting the wrong period.<\/strong> Make sure you&#8217;re reporting the taxes collected in the current return period, not the current calendar month.<\/li>\n\n\n\n<li><strong>Using outdated rates.<\/strong> States and localities update sales tax rates regularly. If your store&#8217;s configured rates are stale, you&#8217;re collecting the wrong amount. Check rates against current state publications at each filing period.<\/li>\n\n\n\n<li><strong>Missing a nexus state.<\/strong> If you crossed a threshold mid-year and didn&#8217;t register, you may owe back taxes for that period, so consult a tax professional to understand your specific exposure. A nexus review at the start of each year catches most of these before they become delinquencies, but ongoing monitoring throughout the year is the best practice to identify new obligations as they arise rather than waiting until year-end.<\/li>\n\n\n\n<li><strong>Skipping marketplace sales on your return.<\/strong> Some states require marketplace-facilitated sales to appear on your return as a separate, non-taxable line item. Filing without them can trigger discrepancies.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For stores registered in more than three or four states, <strong>sales tax software that integrates with your store and pre-populates returns is worth evaluating<\/strong>. The cost is almost always less than the time (and the mistakes) you&#8217;d otherwise spend on it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Note: Where an accountant is less likely to help proactively is nexus monitoring. They&#8217;ll catch new threshold crossings at year end, not necessarily mid-year when you&#8217;ve already crossed them. That&#8217;s the piece that benefits most from automation.<\/p>\n\n\n\n<h2 id=\"h-what-to-do-if-you-ve-already-been-selling-without-collecting\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what-to-do-if-youve-already-been-selling-without-collecting\"><\/span>What to do if you&#8217;ve already been selling without collecting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Oops: you&#8217;ve been selling for a year or more, crossed nexus thresholds in a few states, and never registered or collected. Deep breath: here&#8217;s what to do.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Start by <em>not<\/em> ignoring it. <strong>States can and do audit online sellers, and the longer the gap, the larger the exposure<\/strong>. Coming forward voluntarily almost always produces a better outcome than being discovered, but voluntary disclosure procedures have their own specifics by state, so consult a tax professional before deciding on next steps.<\/p>\n\n\n\n<h2 id=\"h-ecommerce-sales-tax-checklist-what-to-do-first\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ecommerce-sales-tax-checklist-what-to-do-first\"><\/span>Ecommerce sales tax checklist: what to do first<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Use this as your starting point if you&#8217;re setting up sales tax from scratch, or getting compliant after a gap.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Pull your order data by shipping state<\/strong> (covering whatever period your states require, whether that&#8217;s a rolling 12 months, the previous calendar year, or the current one) and compare against each state&#8217;s nexus threshold. Identify every state where you&#8217;ve crossed, or are close to, the limit. <em>Using Stripe Tax? It monitors your sales volume by state and flags threshold crossings automatically \u2014 skip the manual review once it&#8217;s set up.<\/em><\/li>\n\n\n\n<li><strong>Register for a sales tax permit in each nexus state before you start collecting.<\/strong> This step is always manual \u2014 there&#8217;s no way around it. The Streamlined Sales Tax Registration System (SSTRS) lets you register in multiple states at once if you&#8217;ve crossed several thresholds simultaneously.<\/li>\n\n\n\n<li><strong>Check product taxability rules in each registered state for every category you sell.<\/strong> Categories like clothing, groceries, and digital products often have state-specific exemptions or special treatment, though the rules vary. <em>If you\u2019re using Stripe Tax, assign the correct tax code to each product and Stripe handles the rest.<\/em><\/li>\n\n\n\n<li><strong>Configure your store to collect the correct rate.<\/strong> Use a basic tax setup for straightforward setups, or Stripe Tax for automated calculation and nexus monitoring. <em>On SiteGround Ecommerce, both the Basic Tax Setup and Advanced Tax Setup with Stripe are built in.<\/em><\/li>\n\n\n\n<li><strong>Build a filing calendar with each state&#8217;s assigned frequency and deadline<\/strong> \u2014 or hand this off to your accountant. Either way, don&#8217;t skip it: missing a filing deadline triggers penalties even if the tax was already collected.<\/li>\n\n\n\n<li><strong>If you&#8217;ve been selling without collecting:<\/strong> consult a tax professional about options before you file anything.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">For first-time sellers <a href=\"https:\/\/academy.siteground.com\/en\/planning-tips-for-your-first-online-shop\" data-type=\"post\" data-id=\"12076\" target=\"_blank\" rel=\"noopener\">planning to start an online store<\/a>, the best time to handle this is before your first sale (or at least before you cross any thresholds). Do it now.<\/p>\n\n\n\n<h2 id=\"h-get-your-store-collecting-correctly-from-day-one\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"get-your-store-collecting-correctly-from-day-one\"><\/span>Get your store collecting correctly from day one<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is a lot of information, and you do want to get it right. But it&#8217;s more manageable than it looks. <strong>Run your nexus check, get registered in the states where you owe, and configure your store to collect automatically.<\/strong> For the ongoing filing and remittance, lean on capable partners: an accountant who knows multi-state compliance, Stripe Tax for automated calculation and monitoring, and a platform that makes setup straightforward from day one.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"https:\/\/www.siteground.com\/ecommerce\" target=\"_blank\" rel=\"noopener\">SiteGround Ecommerce<\/a> gets you compliant quickly and easily, with a Basic Tax Setup or Advanced Setup with Stripe, no plugins required. <\/strong>But tax is just one piece of what the platform handles out of the box. You also get a conversion-optimized checkout, built-in SEO tools, AI-powered product management, email marketing, and enterprise-grade hosting \u2014 all from one dashboard, without stitching together third-party tools.<\/p>\n\n\n<p>[103]<\/p>\n\n\n\n<h2 id=\"h-frequently-asked-questions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"frequently-asked-questions\"><\/span>Frequently asked questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1785742165700\"><strong class=\"schema-faq-question\">Do I need to collect ecommerce sales tax for online sales?<\/strong> <p class=\"schema-faq-answer\">Yes, if you have nexus in a state and the product that you sell is taxable. Nexus can be physical (a warehouse, employees, or inventory stored there) or economic, meaning you&#8217;ve crossed that state&#8217;s sales or transaction threshold. You&#8217;re not required to collect in states where you have no nexus, or in states that have no sales tax \u2014 though note that even in some of those states, local jurisdictions may still impose their own taxes.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1785742200079\"><strong class=\"schema-faq-question\">What is economic nexus and how does it affect my online store?<\/strong> <p class=\"schema-faq-answer\">Economic nexus is the standard that lets states require out-of-state online sellers to collect sales tax once they cross a sales threshold, even without physical presence. It was established by the 2018 Supreme Court ruling in <em>South Dakota v. Wayfair<\/em>. The most common threshold is $100,000 in annual sales or 200 transactions to customers in that state, but thresholds and measurement periods vary by state, so check each state&#8217;s specific rules. Cross either, and you&#8217;re required to register and collect.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1785742230593\"><strong class=\"schema-faq-question\">How do I know which states I owe sales tax in?<\/strong> <p class=\"schema-faq-answer\">Run a sales report covering whatever period the states require (a rolling 12 months, the previous calendar year, or the current one) grouped by the state each order shipped to. Total up your sales and transaction count for each state, then compare against that state&#8217;s current nexus threshold. Any state where you&#8217;ve exceeded either figure is a state where you likely have an obligation. Note that some states only count taxable sales toward the threshold, so check the state&#8217;s specific rule before totaling.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1785742245781\"><strong class=\"schema-faq-question\">What happens if I don&#8217;t collect sales tax?<\/strong> <p class=\"schema-faq-answer\">You&#8217;re still liable for the uncollected tax, and it will come out of your pocket rather than your customers&#8217;. Consult a tax professional to understand your specific situation and options. A state audit can result in the full back tax amount, plus interest and penalties. Most states also penalize late or missing registrations separately.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1785742259198\"><strong class=\"schema-faq-question\">Do marketplaces like Amazon or Etsy collect sales tax for me?<\/strong> <p class=\"schema-faq-answer\">Yes, for sales made through those platforms. Under marketplace facilitator laws, Amazon, Etsy, eBay, and similar platforms are generally required to collect and remit sales tax on sales they facilitate, though specifics vary by state, so verify the rules where you have nexus.. But those sales can still count toward your economic nexus threshold in many states, meaning you may still need to register and collect for sales made through your own store, even if the marketplace has your third-party sales covered.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>Too often, online sellers discover their US sales tax obligations the same way: a notice from a state revenue department, or a tax season conversation that turns uncomfortable fast. It doesn&#8217;t help that the rules changed significantly in 2018. Now you can owe in states where you&#8217;ve never set foot, based purely on how much &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/academy.siteground.com\/en\/ecommerce-sales-tax\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Ecommerce sales tax: How to know if you owe it, register, and collect correctly&#8221;<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":27911,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-27916","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ecommerce"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.9 (Yoast SEO v28.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Ecommerce Sales Tax: When You Owe It and What to Do- SiteGround Academy<\/title>\n<meta name=\"description\" content=\"Not sure if you need to collect ecommerce sales tax? 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