Ecommerce sales tax depends on where a seller has nexus, where the customer takes delivery, what the seller is shipping, and which marketplace or sales channel is involved. Rules differ across states and local jurisdictions.
Nexus for online sellers
Physical nexus can arise from offices, employees, inventory, warehouses, or other in-state activity. Economic nexus can arise when sales or transactions cross a state threshold, even without a physical presence. After South Dakota v. Wayfair, businesses must monitor both types of connection.
Marketplace facilitators
Amazon, eBay, Etsy, and other marketplaces may collect and remit tax under marketplace facilitator laws. That does not eliminate the need to understand your registrations, returns, direct-channel sales, or reporting obligations. Keep marketplace-facilitated sales separate from sales through your own store.
Destination and origin sourcing
Most ecommerce transactions use destination-based sourcing, so the buyer's delivery location determines the rate. A small number of states use origin-based rules. ZIP codes alone may not identify the correct local jurisdiction.
Use tax and recordkeeping
Use tax can apply when a taxable purchase was made without enough sales tax being collected. Keep transaction records, exemption certificates, tax collected, and filed returns organized for review.
Kintsugi helps ecommerce businesses monitor nexus, calculate tax using address-level data, and automate filings as their products and channels grow.
