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Frequently Asked Questions
Do I need to collect sales tax in every state I sell to? ▾
Since the Supreme Court's 2018 South Dakota v. Wayfair decision, states can require out-of-state businesses to collect sales tax if they exceed economic nexus thresholds — typically $100,000 in sales or 200 transactions in that state per year. If you sell online and exceed these thresholds in multiple states, you may have sales tax obligations in those states. Use a sales tax automation tool like Avalara or TaxJar to manage multi-state compliance.
What items are exempt from sales tax? ▾
Exemptions vary widely by state. Common exemptions: groceries (most states), prescription drugs (nearly all states), medical devices (varies), certain clothing (NY, PA), agricultural supplies, and digital services (varies). Some states have sales tax holidays for back-to-school items or disaster preparedness supplies. Always verify the specific exemptions in each state where you collect tax.
How do I remit collected sales tax? ▾
Register for a sales tax permit in each state where you have nexus (free in most states). File sales tax returns monthly, quarterly, or annually depending on your sales volume (most states have three tiers). Remit the collected taxes with your return. Most states offer online filing through their Department of Revenue website. Software like QuickBooks, Avalara, or TaxJar can automate filing across multiple states.