If you’re a small business owner, you’ve probably told yourself: “Sales tax? That’s for the big guys.” After all, you’re just getting started. Maybe you sell handmade candles on Etsy, dropship products on Shopify, or offer a few digital downloads on the side. Why would the state care about your little shop?
Here’s the truth: they do care. In fact, state tax authorities are paying closer attention than ever before—and size doesn’t protect you from sales tax laws.
Many business owners assume sales tax laws don’t apply to them—but states don’t care how small you are.
Thanks to the 2018 South Dakota v. Wayfair Supreme Court decision, states can now enforce “economic nexus” laws. That means even if your business has no physical presence in a state, you may still be required to collect and remit sales tax if your sales meet certain thresholds—sometimes as low as $100,000 in sales or just 200 transactions in a year. And yes, that includes ecommerce and service-based businesses.
Think you’re under the radar? Here’s where it gets tricky:
- Every state has its own rules. What counts as “doing business” in one state may be totally different in another.
- Thresholds aren’t as high as you think. Some states count total sales revenue, including exempt items like digital goods or wholesale orders.
- Marketplace facilitators can only do so much. Even if you sell through Amazon, Etsy, or Walmart, you might still have your own obligations to register and file in certain states.
What does that mean for your business? Without realizing it, you could be noncompliant—and potentially racking up penalties, interest, or audit risk.
The good news? With the right tools and guidance, staying compliant doesn’t have to be overwhelming. Bookkeeping software, tax automation platforms, and expert advisors can help you track where you have nexus, collect the right tax, and stay on top of filings.
Here’s how even a tiny store can trigger BIG tax obligations (and how to protect yourself).
Interested in a no-obligation free consultation? Schedule a time with us here :
https://yellowbrickfinancials.hbportal.co/schedule/663165633aaf34001f4c93c2
