Sales tax nexus by state is the question every online seller eventually has to answer: which states can require you to collect and remit sales tax, and when did that obligation start? Since the Supreme Court's 2018 Wayfair decision, nexus no longer requires a physical presence — hitting a state's economic threshold through sales volume or transaction count alone can create an obligation, even if you have never shipped a warehouse or hired an employee there.
Economic nexus thresholds vary by state, typically framed around a dollar amount of sales, a transaction count, or both, measured over a rolling or calendar-year period. A seller doing meaningful volume on Amazon, Shopify, and a handful of other channels can cross multiple states' thresholds without ever tracking it manually — which is exactly how sellers end up with an unregistered, uncollected liability that surfaces years later in an audit or a marketplace notice.
Marketplace facilitator laws complicate the picture further. In most states, a marketplace like Amazon collects and remits sales tax on your behalf for sales made through that marketplace — but those marketplace-collected sales often still count toward your economic nexus threshold in that state, even though you never touched the tax yourself. A seller can have nexus in a state from marketplace sales alone and not realize direct-channel (Shopify, their own site) sales there now require registration too.
Registration is not automatic and it is not retroactive protection — once you cross a state's threshold, you generally need to register, then collect and remit going forward, and some states expect you to address the exposure period before the threshold was identified. Waiting until a state sends a notice is the expensive way to find out; by then, the state may assess tax, penalties, and interest going back further than you tracked.
The bookkeeping side of nexus is where most sellers actually go wrong: sales need to be tracked by ship-to state, not just by channel, so you can see running totals against each state's threshold before you cross it, not after. Marketplace-collected versus self-collected tax needs separate treatment in the books, since only one of those is your liability to remit. And once you are registered in a state, that state's collected tax is a liability on your balance sheet until it is remitted, not revenue.
Multi-channel sellers add another layer: Amazon FBA inventory stored in a fulfillment center can itself create nexus in the state where that warehouse sits, independent of your sales volume there, depending on the state. Combined with economic nexus from sales, an active FBA seller can have far more state-level obligations than a single-channel seller with the same revenue.
None of this is tax advice — nexus determinations and registration decisions should be made with your CPA or a sales-tax professional, since thresholds, look-back periods, and marketplace-facilitator rules change and vary by state. What good bookkeeping does is make sure the data your CPA needs — sales by ship-to state, marketplace-collected versus direct-channel tax, and running totals against thresholds — is accurate and visible before a state sends a notice, not reconstructed after one arrives.
Our team reconciles multi-channel settlements (Amazon, Shopify, and others), tracks sales-tax collected as a liability rather than revenue, and organizes sales by state so nexus exposure is visible before it becomes a problem. If you are scaling across channels or states, a discovery call is the fastest way to see where your exposure actually stands.
Frequently Asked Questions
Do I have nexus if Amazon already collects the sales tax for me?
Possibly. Marketplace-collected sales often still count toward your economic nexus threshold in that state, so you can have a registration obligation for your direct-channel sales even though Amazon handled marketplace sales.
Does Amazon FBA inventory storage create nexus by itself?
In some states, yes — inventory stored in a fulfillment center can create nexus independent of your sales volume in that state. This varies by state and is worth confirming with your CPA.
What should my books track for sales tax purposes?
Sales by ship-to state, marketplace-collected versus self-collected tax handled separately, and sales-tax collected recorded as a liability rather than revenue until it's remitted.
Can you help if I think I already have unaddressed nexus exposure?
Yes. New clients get a free historical cleanup, so we can organize your sales history by state and give your CPA the data needed to assess exposure and registration timing.