Sales & Use Tax Compliance Services

Before 2018, a business only had to collect sales tax in a state where it had a physical presence – an office, a warehouse, employees, or stored inventory. The Supreme Court's decision in South Dakota v. Wayfair changed that. States can now require collection based on economic nexus: sales volume alone, with no physical footprint at all.

Most states set the economic nexus threshold at $100,000 in sales or 200 separate transactions measured over a 12-month period. The exceptions matter. Several large states use higher, revenue-only thresholds – California, Texas, and New York, for example, sit around $500,000 – and a growing number of states have dropped the 200-transaction test entirely because it caught too many small sellers. Measurement periods differ too, so a business can cross a line mid-year and owe from that point forward.

Sales tax vs. use tax

Sales tax is collected by the seller at the point of sale and remitted to the state. Use tax is the buyer's mirror image: when a taxable item is bought and no sales tax was charged, the buyer self-assesses and remits use tax directly. Use tax surfaces most often on out-of-state and online purchases and on inventory pulled for internal use, and because so few businesses track it, it is one of the first lines an auditor tests.

Marketplace facilitator rules

If a business sells through a marketplace such as Amazon, the marketplace is usually required to collect and remit the sales tax on those sales. That does not always remove the seller's own obligation, though – direct-channel sales still count toward a state's threshold, and some states require the seller to register and file zero or informational returns even where the marketplace remits. We separate marketplace-facilitated sales from direct sales when we test each threshold, so a business neither over-registers nor misses a direct-channel obligation. The final nexus call stays with you; the data and the documentation come from us.

Registration and account setup

When a nexus review shows where collection should begin, we prepare and submit the sales tax permit applications, set up the state accounts, and record the assigned filing frequency and first due date for each one. We register on the effective date the exposure actually starts, not earlier, so a business does not create a filing obligation before it exists. Each new account feeds straight into the filing calendar so the first return is never the one that slips.

Taxability determination

Whether a sale is taxable depends on what is sold and where it ships. The same item can be taxable in one state, fully exempt in another, and taxable only above a price threshold in a third, and software, digital goods, and services carry their own state-by-state treatment. We map each product and service to the correct treatment per state so the right rate and rule apply at the transaction level, rather than a single blanket assumption that breaks under audit.

Exemption certificate management

Every untaxed sale needs a reason on file. Resale certificates, manufacturing exemptions, and nonprofit exemptions all have to be collected, validated, and kept current. The risk is simple and one-sided: in an audit, an exempt sale without a valid, complete certificate is treated as taxable, and the assessment plus penalties and interest lands on the seller, not the buyer. We collect missing certificates, validate the ones on hand, track expirations, and keep the file organized so an auditor can follow it. This runs inside SOC 2 aligned, role-based security.

States do not all file on the same cadence. Each assigns a frequency – monthly, quarterly, or annual – usually based on a business's liability, and they reassign it as volume changes. High-volume states often add prepayment requirements, where an estimated payment is due mid-period and the return reconciles it later. Across fifteen or twenty registrations, that becomes dozens of moving due dates.

We keep one calendar covering every active registration, its frequency, and each due date. Returns are prepared from the period's transaction data, reviewed, and filed ahead of the deadline, with the tax remitted on the state's required method – many states mandate electronic filing and payment above a threshold. Where a state issues a notice or a discrepancy appears between filed and remitted amounts, we handle the response and the reconciliation rather than leaving it to surface later.

The point of the calendar is visibility. You see what is filed, what is pending, and what is paid, so peak periods do not turn into a scramble. The same discipline plugs into the wider tax preparation services our teams deliver, and it stays distinct from multistate income tax preparation, which runs on an annual cycle with its own rules.

A nexus review often turns up back-year exposure - a state where collection should have started two or three years before anyone registered. Left alone, that exposure compounds with penalties and interest, and it is exactly what a state audit is built to find. The cleaner path is to come forward first.

A voluntary disclosure agreement (VDA) is a deal with the state: in exchange for disclosing the unpaid tax before being caught, the state limits the lookback period – commonly three to four years rather than every open year – and usually waives penalties. The approach is typically made anonymously until terms are set. We prepare the exposure analysis, manage the approach, and complete the back filings so the resolution is controlled rather than discovered in an examination.

When an audit is already underway, the work shifts to defense. We assemble the transaction data, exemption certificates, and reconciliations the auditor will ask for, and we organize them so the auditor can follow the support without inflating the assessment. Clean documentation is the difference between an exempt sale that holds and one that becomes taxable on the spot.