Confused about sales tax exemptions for new online business selling across multiple states

Hey everyone, I could really use some advice here. I've recently started a new ecommerce venture that'll be selling products online to customers throughout the US. I've discovered I need to file for sales tax exemption forms in the different states where I plan to sell my products. From what I understand, my payment processor can be configured to calculate and apply the appropriate sales tax rates for each state, which would help me keep track so I can remit the collected taxes to the respective states. The problem is I'm getting the runaround. I reached out to my CPA for guidance, and they said they can only help with the tax exemption form for my home state but nothing beyond that. Then they directed me to my payment processor for help. When I contacted the payment processor, they just told me to ask my CPA! I'm completely lost on how to navigate this process for multiple states. Do I need to register in every state? How do I manage all the different requirements? Any insights or experiences would be incredibly helpful. Thanks in advance!

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19 comments

Chloe Robinson

•8M

So this is actually a pretty complex area that confuses a lot of new ecommerce sellers. What you're dealing with is called "sales tax nexus" - basically the connection that requires you to collect and remit sales tax in a particular state. After the Supreme Court's South Dakota v. Wayfair decision in 2018, states can require online sellers to collect sales tax even if they don't have a physical presence in the state. Most states have implemented economic nexus thresholds - like if you have over $100,000 in sales or 200 transactions in a state per year. The good news is you typically don't need to register everywhere right away. You only need to register in states where you have nexus. For a new business, that's probably just your home state initially. As you grow and exceed thresholds in other states, you'll need to register there too. Your payment processor can help calculate the right rates, but they can't register you for sales tax permits - that's something you'll need to do yourself for each relevant state.

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Chloe Robinson

•8M

Yes, you only need to register in states where you exceed the economic nexus thresholds - but having inventory in a state creates physical nexus immediately, regardless of your sales volume. If you're using a fulfillment service that stores your inventory in multiple states, you'll need to register for sales tax permits in each of those states. This is especially important if you're using something like Amazon FBA, which moves inventory between warehouses in different states without necessarily notifying you in advance. Many sellers use software solutions like TaxJar or Avalara to help manage this complexity, especially once they're registered in multiple states.

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Diego Flores

•8M

After struggling with similar sales tax confusion for my online boutique, I tried taxr.ai (https://taxr.ai) and it saved me so much headache! I uploaded my sales reports and business info, and it showed me exactly which states I needed to file in based on where I had economic nexus. It even helped me understand when I needed to collect exemption certificates from wholesale customers vs charging sales tax to retail customers. The system analyzed my situation and provided step-by-step guidance for registering in each relevant state, plus it tracks your thresholds so you know when you're approaching nexus in new states. Definitely worth checking out for ecommerce sellers navigating multi-state sales tax!

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Diego Flores

•8M

It definitely helps streamline the registration process by providing the exact forms and requirements for each state, though you still have to submit them yourself. The state-specific guidance saved me hours of research since everything was in one place. As for marketplace facilitator laws, it clearly breaks down which marketplaces are collecting taxes in which states, so you only need to worry about collecting for your direct sales. It shows side-by-side comparisons of what Amazon/Etsy/etc. are handling versus what you're responsible for. Really clarifies the whole mess!

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Sean Flanagan

•8M

Just wanted to follow up - I tried taxr.ai after seeing it mentioned here and it was exactly what I needed! I was making some serious mistakes with my Etsy and Amazon sales. Turns out I was double-collecting in some states where the marketplace was already handling the tax, but completely missing collection in states where I had my own website sales. The state registration guidance was super clear and it even flagged a potential audit risk in Florida where I had nexus but hadn't registered. Just registered there last week and now I'm feeling so much more confident about my compliance. No more tax anxiety keeping me up at night!

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Zara Mirza

•8M

If you need to actually talk to someone at your state's department of revenue to get specific questions answered, good luck with that! I spent THREE WEEKS trying to get through to California's tax department about my seller's permit. Kept getting disconnected or waiting on hold for hours. I finally used Claimyr (https://claimyr.com) to get through to an actual human. You can see how it works here: https://youtu.be/_kiP6q8DX5c but basically it navigates the phone menu for you and calls you back when it reaches a real person. Saved me from completely losing my mind trying to get answers about collecting sales tax for digital products.

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Zara Mirza

•8M

It absolutely works - they aren't calling "for you," they're just navigating the phone tree and holding your place in line. When they reach a human, they connect you directly to the call. The agent has no idea you used a service, they just think you waited on hold like everyone else. It's particularly useful for state tax departments because they tend to have the worst hold times and most complex phone menus. I've used it successfully with California, New York, and Texas tax departments, and the IRS too. You're still the one talking to the government agent - Claimyr just handles the hold time for you.

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Luca Russo

•8M

I need to apologize for my skepticism. I was so frustrated after multiple failed attempts to reach my state's tax department that I didn't think anything could help. Decided to try Claimyr out of desperation last week and it actually worked! Got connected to a real person at the Georgia Department of Revenue after they handled a 94-minute hold time (that I didn't have to sit through). The agent answered all my nexus questions and confirmed I only needed to register in states where I exceed the economic threshold OR have physical presence. Saved me from registering in about 15 states unnecessarily. Sometimes you really do need to talk to a human to get the right answers for your specific situation.

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Nia Wilson

•8M

There are definitely systems to help manage exemption certificates! Avalara CertCapture is probably the most comprehensive, but it's pricey. For smaller businesses, services like TaxJar Plus or even basic document management systems can work. The key is having a process in place where you collect the certificate before completing a tax-exempt sale. Many ecommerce platforms have built-in functionality or apps to help with this. Just make sure you validate that the certificates are complete (not missing signatures or expiration dates) and that you're storing them securely. Digital copies are acceptable in all states now, so at least you don't need physical paper copies anymore.

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