Do online retail stores need to register for sales tax permits in every state?

Shopify Discussion
1

We are a new online retail store. My question is, do we have to register for a sales tax permit in each state that charges sales tax on apparel? We are strictly online so we could receive orders in all 50 states.

1 Like
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Hey @Jlilyboutique ,

Welcome to the Shopify Community!

This is a complicated question. Every state has differing laws as to whether you need to collect sales tax in their state. You need to start by collecting sales tax from customers in the state where your business is located (unless you live in Alaska, Delaware, Montana, New Hampshire, or Oregon). But before setting up your store to collect sales tax in that state, make sure you register for a sales tax permit.

As your business grows, you will need to start registering, collecting, and remitting sales tax in more states. If you ever grow to have a “physical presence” (employees, warehouses, etc.) in any state, you will need to register, collect, and remit for sales in those states. In general, you’re obligated to collect tax in any US state where you both have economic nexus and sell taxable goods or services.

You should always check with a local tax authority or a tax accountant to make sure that you charge your customers the correct sales tax rates, and to make sure you file and remit the taxes correctly.

For further information, please read the help docs below:

3

Thank you! We are registered in our state and we do have a sales tax
permit. I was just confused on other states, but this is helpful. Thank
you!

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That’s great to hear! Don’t hesitate to reach back out if you require any further assistance as you continue to work on your store.

All the best,

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Hi @Jlilyboutique , the Sidr Tax app is built to solve exactly that. You can use our app to see the total number of orders and gross sales within any time period. Which is what you need to determine whether you have hit the “Nexus Status”. When you are approaching your “Nexus Status”, you will need to register with the state to start collecting tax.

For the “Nexus Status” requirement of each state, please refer to this handy chart.