# Essential Guide to E-Commerce Sales Tax Laws

Canonical: https://trykintsugi.com/blog/essential-guide-to-ecommerce-sales-tax-laws
Published: 2024-08-19

Understand nexus, marketplace facilitators, tax sourcing, use tax, and compliance for online sellers.

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.