US sales tax: nexus, marketplace facilitator & multi-state filing
US sales tax is the most fragmented compliance surface a small business faces — 45 states (plus DC) levy it, each with their own rate, threshold, sourcing rule, and filing schedule. The Wayfair decision broke physical-presence as the only nexus trigger; today you can owe tax in a state you've never set foot in just because your sales volume crossed a line.
The two ways sales tax nexus is created
Physical-presence nexus — the old rule. You have a warehouse, office, employee, contractor, inventory, or trade-show booth in the state. Triggers nexus from day one.
Economic nexus — the post-Wayfair rule. You hit a sales-volume or transaction-count threshold in the state during the previous or current calendar year. Triggers nexus retroactively to the threshold-crossing day in most states, with a 30-day registration window from then.
Both rules can apply simultaneously. If you have a warehouse in Texas and crossed New York's $500,000 threshold, you owe tax in both states even though they're triggered differently.
Economic nexus thresholds, by tier
| Tier | Threshold | Example states |
|---|---|---|
| Standard | $100,000 sales OR 200 transactions | Most states |
| Sales-only (no transaction count) | $100,000 sales | Arizona, Florida, Kansas, Massachusetts, North Dakota, Wisconsin |
| Higher sales-only | $500,000 sales | California, New York, Texas |
| No state-level sales tax | N/A | Alaska (local only), Delaware, Montana, New Hampshire, Oregon |
Always confirm the current threshold on the state's DOR website before relying on this table — rules change yearly and some states have rolled out / rolled back transaction-count tests.
Marketplace facilitator: the most common confusion
When you sell through Amazon, Etsy, eBay, or Walmart Marketplace, the marketplace is legally the seller of record for sales tax purposes in every state with a marketplace-facilitator law (which is now every state with sales tax). The marketplace collects and remits — you don't.
What you still owe:
- Track marketplace gross sales for nexus purposes — they still count toward your threshold for any direct-channel sales.
- File your own state returns reporting the marketplace sales as a deductible "gross sales facilitated by a marketplace" line, then deduct it from taxable.
- Register in any state where the marketplace puts you over the threshold even if you don't sell direct there yet.
HelloBooks splits marketplace-facilitator sales out of direct sales on import so the right number flows to each line of the return.
Sourcing: which rate applies
Destination-sourced — most states. Charge the rate at the buyer's ship-to address. Includes state + county + city + special-district where applicable.
Origin-sourced (intra-state only) — Arizona, Illinois, Mississippi, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, Virginia for some sale types. Charge the rate at the seller's location for sales inside the state.
Inter-state sales are always destination-sourced regardless of the seller's state.
Home-rule states (Colorado, Louisiana, Alabama, Arizona) add a layer — local jurisdictions can have their own rate, registration, and return. On Pro and above, HelloBooks computes rates through Avalara AvaTax so county / city rates stay current per ship-to address (Free Plan applies manual per-state rates).
Filing frequency by volume
States assign your filing frequency when you register, based on expected tax liability:
- MonthlyHigher-volume sellers (typically > $500–1,000 tax/mo)
- QuarterlyMid-volume sellers
- AnnuallyLow-volume sellers (typically < $100 tax/yr)
File zero returns in inactive months — most states require it and some assess automatic late-filing penalties for skipping a return even with no tax due.
How HelloBooks does this
HelloBooks is built for multi-state US sellers. Connect your sales channels once, then the system tracks nexus, applies the right destination rate, and prepares per-state returns automatically.
- 1
Set up your home state and existing nexus
Add your home state and any other state where you have physical presence (warehouse, employee, inventory) in Settings → Sales Tax. HelloBooks treats these as immediate-nexus states and starts charging tax from day one.
- 2
Connect your sales channels
Link your website, marketplace facilitators (Amazon, Etsy, eBay, Walmart), and POS / Shopify. HelloBooks separates marketplace-facilitator gross sales (the marketplace remits) from your own direct sales (you remit) so the nexus tracker uses the right number.
- 3
Watch the economic-nexus tracker
HelloBooks tracks running totals per state against each state's threshold and emails you when you hit 80%. That gives you time to register before crossing the line and triggering late-registration penalties.
- 4
Register in each state where you have nexus
Use the state's DOR portal (or the Streamlined Sales Tax registration if eligible) to get a sales-tax permit. Enter the permit number, filing frequency, and any local jurisdictions into HelloBooks — the system will start collecting tax on the next invoice.
- 5
Collect and remit on schedule
HelloBooks generates the state-specific sales tax return draft (or the data the state portal needs) on the assigned filing schedule. Review, file directly with the state, then mark the return paid in HelloBooks to close the period.
Frequently asked questions
What changed about US sales tax after the Wayfair decision?
Before South Dakota v. Wayfair (2018), states could only require sales tax collection from sellers with physical presence — an office, warehouse, employee, or inventory in the state. After Wayfair, states can require collection based on economic nexus alone: hitting a sales-volume or transaction-count threshold in the state during the lookback period. Every state with sales tax has since adopted an economic-nexus rule.
What is the standard economic-nexus threshold?
Most states use $100,000 in sales OR 200 separate transactions in the state during the previous or current calendar year. A growing number of states (Arizona, California, New York, Texas) have dropped the transaction-count test and use sales-only — typically $100,000 or $500,000 depending on state size. Check the specific state's DOR website before relying on the default — thresholds and lookback periods vary.
Are there states with no sales tax?
Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon (NOMAD). Alaska allows local jurisdictions to impose their own sales tax, and several Alaska boroughs do. Selling to customers in NOMAD states does not create state sales-tax nexus, but local Alaska tax may still apply.
What is a marketplace facilitator and how does it change my filing?
A marketplace facilitator (Amazon, Etsy, eBay, Walmart Marketplace, Shopify Markets in some states) is the platform that processes the transaction. In every state with sales tax, the marketplace is now legally required to collect and remit sales tax on the seller's behalf. You still track the gross sales for nexus purposes, but you do NOT remit tax on marketplace-facilitator transactions yourself.
Do I need to register in every state where I have nexus?
Yes. Each state with sales tax requires its own registration (a Sales Tax Permit, Seller's Permit, or equivalent), assigns its own filing frequency (monthly, quarterly, or annually based on volume), and requires its own return. The Streamlined Sales Tax (SST) Agreement lets you register in 24 member states with one application — useful for sellers with broad multi-state nexus.
What are the most common sales-tax filing mistakes?
Five common mistakes: (1) treating marketplace-facilitator sales as your own remittance obligation, (2) missing the registration deadline after crossing the threshold (most states require registration within 30 days), (3) forgetting to file zero returns in inactive months, (4) using the wrong tax rate for destination-based vs origin-based states, and (5) ignoring local (county/city) sales tax in home-rule states like Colorado, Louisiana, and Alabama.
Do I charge sales tax on services?
It depends on the state. Most states tax tangible personal property but exempt services by default — though states like Hawaii, New Mexico, South Dakota, and Washington tax most services. The trend is toward taxing more services (digital services, SaaS, professional services) — check the state's taxability matrix before invoicing service revenue.
What is sales tax sourcing — origin vs destination?
Sourcing rules decide which jurisdiction's rate applies. Most states are destination-based — you charge the rate at the buyer's shipping address. A handful (Arizona, California for some types, Illinois, Mississippi, Missouri, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, Utah, Virginia) are origin-based or hybrid for intra-state sales. Inter-state sales are always destination-sourced. HelloBooks applies the right sourcing automatically when you tag the customer's ship-to state.
More on US compliance
1099-NEC and 1099-MISC Filing: Thresholds, Forms & Due Dates
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Read payroll & w-2State Franchise Tax: Delaware, California, Texas & New York
The flat-fee state taxes LLCs and corporations owe just for existing — DE annual report, CA $800 minimum, TX margin, NY biennial.
Read franchise taxQuarterly Estimated Tax: Form 1040-ES, Safe Harbor & Due Dates
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Read quarterly estimated taxAuthoritative sources
US tax rules change every filing season. Always verify the current position with the official sources below before filing.
- IRS — irs.govInternal Revenue Service. Forms, publications, due dates, and current-year thresholds for federal income tax, payroll tax, and 1099 reporting.
- IRS — Forms & InstructionsCanonical PDF forms (W-4, W-9, 1099-NEC, 1040-ES, 941, 940, W-2, W-3) with current-year instructions.
- SSA — Business Services OnlineSocial Security Administration portal for W-2 / W-3 e-filing, EIN verification, and AccuWage validation.
- Streamlined Sales Tax — streamlinedsalestax.orgMulti-state Streamlined Sales and Use Tax Agreement (SSUTA) — registration in 24 SST member states with one application.
- Tax Foundation — Sales Tax & NexusIndependent state-by-state research on sales tax rates, economic nexus thresholds, and franchise / margin tax structures.
Run all of this on autopilot in HelloBooks
US sales tax, state franchise tax, and quarterly estimated tax workflows are built into the free plan. Plaid connects 11,000+ US banks so transactions land in your books automatically. 1099 generation and Gusto-backed payroll are in private preview — ask us for access.