U.S. Sales Tax Compliance – A Complete Guide for Businesses
May 27, 2025
Syed Kausar
Sales tax in the United States is unlike anywhere else in the world. Instead of a single federal tax, there are 46 states and over 12,000 local jurisdictions, each with its own rules, rates, and filing requirements. For businesses — especially in eCommerce, SaaS, retail, and services — this creates a compliance nightmare that can quickly lead to penalties, back taxes, and audits. At ADYZER, we help businesses simplify sales tax compliance across all 50 states, ensuring accuracy, efficiency, and peace of mind.
Understanding U.S. Sales Tax Obligations
1. Economic Nexus Rules
The South Dakota v. Wayfair (2018) decision changed everything. Businesses now owe sales tax even without physical presence if they exceed certain thresholds in a state.
California
$500,000 in annual sales
New York
$500,000 and 100+ transactions
Texas
$500,000 in sales
Florida
$100,000 in sales
Each state has its own threshold, meaning your compliance footprint expands as your business grows.
2. Physical Nexus Rules
Even before Wayfair, states required sales tax if you had employees, warehouses, offices, or even trade show presence.
3. Marketplace Facilitator Laws
If you sell on Amazon, Walmart, Etsy, or Shopify, those platforms may collect and remit sales tax on your behalf — but you may still be required to register or file in certain states.
Common Challenges Businesses Face
Multi-State Registrations
A small eCommerce business may need to register in 10+ states
Product Classification Errors
Food, clothing, SaaS, and digital goods all have varying rules by state
Exemption Certificates
Mishandled resale or nonprofit exemptions are audit red flags
Filing Frequency
States require monthly, quarterly, or annual returns based on revenue
Local Jurisdictions
Cities and counties may impose additional rates beyond state requirements
Filing Deadlines & Penalties
Monthly Filers
Due 20th of the following month (varies by state)
Quarterly Filers
Typically due April, July, October, January
Annual Filers
Often due January 31
Penalties for Non-Compliance
Failure to Register
Retroactive tax assessments
Late Filing
5–10% penalty plus daily interest
Audit Exposure
Multi-year liability + personal liability for owners
Sales Tax Audit Risks
Sales tax audits are increasing nationwide. Common triggers include:
Large jump in sales without tax remittance
Mismatched exemption certificate records
Expanding into new states without registration
Incorrect tax rates applied to products or services
ADYZER's Sales Tax Compliance Solutions
At ADYZER, we transform sales tax from a liability into a managed process.
Our Services Include
Nexus Studies
Determine where you must collect sales tax
Registration Management
State applications and compliance setup
Automated Compliance Tracking
Integrated with QuickBooks, NetSuite, or your ERP
Filing & Remittance
Accurate, on-time submissions in all states
Audit Defense
Representation during state audits
Multi-State Expertise
Covering all 50 states plus local jurisdictions
FAQs About U.S. Sales Tax
Do I need to collect sales tax in every state?
No, only in states where you meet economic or physical nexus thresholds.
What happens if I didn't collect sales tax in prior years?
States may pursue retroactive tax + penalties. Voluntary disclosure agreements can reduce penalties.
Are digital services taxable?
Yes, in many states. SaaS, downloads, and subscriptions are taxable in states like New York and Texas.
Do Amazon or Shopify sellers still need to register?
Yes. Marketplace facilitators remit sales tax, but you may still need to register and file returns.
Why Choose ADYZER for Sales Tax?
Expertise in multi-state compliance and eCommerce taxation
Automated systems for real-time tax tracking
IRS and state-level audit defense
Average penalty savings for clients: $15,000+ per audit
Take Action
Sales tax compliance doesn't have to be overwhelming. With ADYZER, you can expand into new states confidently while staying fully compliant.
Contact Us for Sales Tax Compliance