Sales Tax for Small Businesses: When You Owe It and How to Collect

01What Sales Tax Nexus Means

Nexus is the connection that requires you to collect sales tax in a state. It's created by physical presence — an office, inventory, employees — or, increasingly, by economic activity.

02Economic Nexus and Online Sales

After a landmark Supreme Court decision, states can require out-of-state sellers to collect tax once they cross a sales threshold in that state. If you sell online, you may owe tax in states you've never set foot in.

03Registering to Collect

Before collecting, you register with each state's tax authority. Collecting without registering — or registering and not filing — both cause problems.

04Filing and Remitting

You collect the tax, hold it, and remit it on the state's schedule. It's not your money; treat it as pass-through you're holding in trust.

05Getting Help Early

Multi-state sales tax gets complex fast. Setting up a system early, ideally with professional help, prevents a painful cleanup later.

This article is general information, not individualized tax, legal, or financial advice. Every situation is different — reach out and we'll look at yours directly.