Sales tax compliance USA

Sales tax compliance in the U.S. involves understanding various aspects, including nexus, marketplace facilitator laws, registration, filing, taxability, sourcing rules, and compliance practices. Nexus can be physical (presence, employees, inventory) or economic, with most states adopting economic nexus thresholds following the Wayfair decision.

Common economic nexus thresholds are $100,000 in sales or 200 transactions, though some large states like California, Texas, and New York have higher thresholds (e.g., $500,000) or different metrics. States also vary in how they measure included sales and whether marketplace sales count towards an individual seller's nexus threshold, even if a marketplace facilitator collects the tax.

Nearly all states with sales tax have marketplace facilitator laws. Businesses must register in each state where nexus exists, either through state Department of Revenue (DOR) portals or the Streamlined Sales Tax Registration System (SSTRS) for Streamlined states.

Filing frequencies vary by volume and jurisdiction. The taxability of services, software (SaaS), digital goods, and shipping differs significantly by state, requiring businesses to consult state DOR guidance.

States use either origin- or destination-based sourcing rules, which determine the applicable sales tax rate. Effective compliance practices include maintaining reseller/exemption certificates, segregating sales tax accounts, using automated rate calculation, continuously monitoring nexus, timely registration, considering voluntary disclosure for past liabilities, and thorough documentation for audits.

Sales tax compliance in the U.S. involves understanding various aspects, including nexus, marketplace facilitator laws, registration, filing, taxability, sourcing rules, and compliance practices. Nexus can be physical (presence, employees, inventory) or economic, with most states adopting economic nexus thresholds following the Wayfair decision.

Common economic nexus thresholds are $100,000 in sales or 200 transactions, though some large states like California, Texas, and New York have higher thresholds (e.g., $500,000) or different metrics. States also vary in how they measure included sales and whether marketplace sales count towards an individual seller's nexus threshold, even if a marketplace facilitator collects the tax.

Nearly all states with sales tax have marketplace facilitator laws. Businesses must register in each state where nexus exists, either through state Department of Revenue (DOR) portals or the Streamlined Sales Tax Registration System (SSTRS) for Streamlined states.

Filing frequencies vary by volume and jurisdiction. The taxability of services, software (SaaS), digital goods, and shipping differs significantly by state, requiring businesses to consult state DOR guidance.

States use either origin- or destination-based sourcing rules, which determine the applicable sales tax rate. Effective compliance practices include maintaining reseller/exemption certificates, segregating sales tax accounts, using automated rate calculation, continuously monitoring nexus, timely registration, considering voluntary disclosure for past liabilities, and thorough documentation for audits.