Sales tax compliance management

High-level summary and core guidance for US businesses - Sales/use tax is state (and local) level—no federal sales tax. Compliance requires: determine nexus in each state where you sell; register for a sales/permit account; collect correct tax based on product/service taxability and sourcing rules; file returns and remit on the state's schedule; maintain exemption certificates and supporting records; and prepare for audits (retain records, maintain exemption documentation).

Automation and regular nexus reviews are best practices, especially for multi-state sellers and marketplace activity. 2) Nexus (how obligations arise) - Physical nexus: traditional triggers—offices, employees, inventory/warehouses, representatives, property in the state. (Supported by CDTFA registration guidance.) - Economic nexus: post-Wayfair (2018) states generally require remote sellers to register and collect sales tax once sales or transaction thresholds are met; thresholds vary by state (commonly $100k–$500k or a combination with transaction counts). (Supported by Sales Tax Institute, Avalara, Wolters Kluwer.) - Other nexus types: click-through/affiliate nexus and marketplace facilitator laws (many states have facilitator laws that shift collection responsibility to marketplaces, but sellers must still track and document sales). (Supported by Avalara and Wolters Kluwer materials.) 3) State-by-state variation and examples (use these as model language in the blog): - California (CDTFA): Defines "engaged in business" including physical presence factors and economic nexus $500,000 in combined sales for delivery into California (registration required; registration and filing guidance on CDTFA site).

Excerpt: "Beginning April 1, 2019, you have total combined sales of tangible personal property for delivery in California exceeding $500,000 during the preceding or current calendar year." (CDTFA) - New York: Example from Avalara/Wolters Kluwer: New York economic nexus threshold: $500,000 and 100 transactions; includes gross receipts from sales and SaaS in nexus calculation. (Avalara/Wolters Kluwer excerpts) - North Carolina: Example threshold $100,000 (Avalara excerpt).

Note: thresholds and included/excluded transactions vary by state—some include exempt sales or digital goods, others exclude certain services.

High-level summary and core guidance for US businesses - Sales/use tax is state (and local) level—no federal sales tax. Compliance requires: determine nexus in each state where you sell; register for a sales/permit account; collect correct tax based on product/service taxability and sourcing rules; file returns and remit on the state's schedule; maintain exemption certificates and supporting records; and prepare for audits (retain records, maintain exemption documentation).

Automation and regular nexus reviews are best practices, especially for multi-state sellers and marketplace activity. 2) Nexus (how obligations arise)

- Economic nexus: post-Wayfair (2018) states generally require remote sellers to register and collect sales tax once sales or transaction thresholds are met; thresholds vary by state (commonly $100k–$500k or a combination with transaction counts). (Supported by Sales Tax Institute, Avalara, Wolters Kluwer.)

3) State-by-state variation and examples (use these as model language in the blog): - California (CDTFA): Defines "engaged in business" including physical presence factors and economic nexus $500,000 in combined sales for delivery into California (registration required; registration and filing guidance on CDTFA site).

Excerpt: "Beginning April 1, 2019, you have total combined sales of tangible personal property for delivery in California exceeding $500,000 during the preceding or current calendar year." (CDTFA) - New York: Example from Avalara/Wolters Kluwer: New York economic nexus threshold: $500,000 and 100 transactions; includes gross receipts from sales and SaaS in nexus calculation. (Avalara/Wolters Kluwer excerpts) - North Carolina: Example threshold $100,000 (Avalara excerpt).

Note: thresholds and included/excluded transactions vary by state—some include exempt sales or digital goods, others exclude certain services.

• Physical nexus: traditional triggers—offices, employees, inventory/warehouses, representatives, property in the state. (Supported by CDTFA registration guidance.)
• Other nexus types: click-through/affiliate nexus and marketplace facilitator laws (many states have facilitator laws that shift collection responsibility to marketplaces, but sellers must still track and document sales). (Supported by Avalara and Wolters Kluwer materials.)

Marketplace facilitators and marketplace selling - Most states have marketplace facilitator laws requiring platforms (Amazon, Etsy, etc.) to collect and remit sales tax on marketplace sales. Sellers should verify whether the marketplace collects tax on their behalf and whether they still have reporting or registration obligations. (Avalara and Avalara guide cites marketplace facilitator laws and cautions.)

Registration, filing and remittance - Process

register with the state DOR (online portals), obtain permit/seller's permit, begin collection, and file/ remit per state deadlines. Filing frequency depends on tax liability and state rules (monthly/quarterly/annual). States provide online filing and payment systems (CDTFA example). (CDTFA, Avalara, BDO)

Taxability, exemptions and resale certificates - Taxability varies by product and state (tangible personal property vs services vs digital goods/SaaS). Collect and retain valid exemption/resale certificates and use automation or certificate-management tools where volume is large. (Avalara, BDO)

Best practices and compliance workflow (practical guidance) - Regular nexus assessments (quarterly or when business activity changes). - Maintain a sales-tax calendar of registration and filing dates across jurisdictions. - Implement tax automation (rate & taxability engines, address validation, exemption certificate management) to reduce errors. (Avalara, Vertex, TaxJar/Avalara references in search results.) - Reconcile tax collected vs remitted; audit-trail best practices; consider voluntary disclosures (VDA) when backfilling prior unregistered liability. - Monitor marketplace facilitator changes and marketplace reporting laws.

Audit triggers and recordkeeping - Common audit triggers

inconsistent rates charged vs. reported locations, missing exemption certificates, unregistered nexus activity, and large or irregular refunds/credits. Keep detailed transaction-level records, exemption certificates, shipping records, and nexus analyses to defend positions. (BDO, CSHCO best-practices excerpt)

Tools, vendors, and further resources - Vendor content is helpful for practical automation options (Avalara

nexus & AvaTax, Avalara Exemption Certificate Management; TaxJar/Vertex/Avalara/ S ovos discussed in search results). For legal/regulatory detail rely on state DORs, Multistate Tax Commission, Streamlined Sales Tax Governing Board, and reputable tax/legal publishers (Wolters Kluwer, Sales Tax Institute). (Avalara, Sales Tax Institute, Wolters Kluwer)