Do I have to collect sales tax in other states?

GuideUSChecked 30 October 202623 primary sources8 min readUK version

The short answer

In the US, you must collect a state's sales tax once you have nexus there: a physical presence, such as staff, an office or inventory, or, since South Dakota v. Wayfair (2018), sales into the state above its economic threshold, which each state sets. Register with the state before you collect, then file returns on the schedule it assigns.

What creates sales tax nexus?

Nexus is the link that lets a state make you collect its tax. It can be physical or, since 2018, purely economic.

  • Physical nexus: an office, staff or inventory in the state. Stock held in a fulfillment warehouse generally creates nexus from the first unit, so pull your 3PL or marketplace location reports.
  • Economic nexus: since South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018), a state may require a remote seller to collect on economic presence alone, once its sales into the state pass the state's threshold.

45 states plus DC have a statewide sales tax. Alaska, Delaware, Montana, New Hampshire and Oregon have none at state level, though Alaska localities do. As of Oct 2026.

What are the economic nexus thresholds?

Each state sets its own amount, period and which sales count. The four largest states, As of Oct 2026:

StateA remote seller must collect once it hasLaw
CaliforniaMore than $500,000 of combined sales of tangible personal property delivered into California in the current or preceding calendar yearRev. and Tax. Code sec. 6203(c)(4)
TexasMore than $500,000 of total Texas revenue in the preceding 12 calendar months34 Tex. Admin. Code sec. 3.286(b)(2)
New YorkMore than $500,000 of sales of tangible personal property delivered in New York and more than 100 such sales, in the immediately preceding four sales tax quarters, both tests togetherTax Law sec. 1101(b)(8)(iv)
FloridaMore than $100,000 of taxable remote sales in the previous calendar yearFla. Stat. sec. 212.0596(1)(b) and (2)

Washington uses more than $100,000 of gross receipts from Washington in the current or prior calendar year (RCW 82.04.067(1)(c) and 82.08.052(2)). Many other states use $100,000, but check each state rather than assume it, and check whether it counts marketplace sales and exempt wholesale sales toward the threshold. States differ. As of Oct 2026.

Does a marketplace collect sales tax for me?

On sales made through it, yes; on your own sales, no. Marketplace facilitator laws in every sales tax state make the marketplace collect and remit on sales through it, and a merchant of record does the same for the sales it makes. Your own website and direct invoices still need your own registration once you have nexus, and some states expect you to register and file even where the marketplace collects. As of Oct 2026.

Do I need to register before I collect?

Yes: get the state's permit before your first taxable sale there. New York requires you to register for a Certificate of Authority at least 20 days before you begin business (Tax Law sec. 1134), and Texas requires a Sales and Use Tax Permit even for a seller operating there only temporarily. As of Oct 2026.

Are services subject to sales tax?

Only where the state taxes that service, and the label on your invoice does not decide it. Examples, As of Oct 2026:

  • Work on buildings: New York taxes repair and maintenance of real property (Tax Law sec. 1105(c)(5)) but not a capital improvement, for which you keep the customer's Form ST-124. Texas taxes repair of nonresidential real property but not residential repair labor (34 Tex. Admin. Code sec. 3.357). In California, installation labor is not taxable and a contractor usually pays tax on materials when buying them (Cal. Code Regs. tit. 18, sec. 1521).
  • Software and data: Texas taxes data processing and information services on 80% of the charge (Tax Code sec. 151.351); New York taxes prewritten software, including remotely accessed software (Tax Law secs. 1101(b)(6) and 1105(a)).
  • Personal services: New York City charges its 4.5% city sales tax on beauty, barbering, manicuring and similar services, with no state tax on them; ordinary hair, nail and skin services are generally not taxed in California, Texas or Florida.
  • Washington has treated specified advertising and information technology services as retail sales since October 1, 2025 (ESSB 5814).

How do resale and exemption certificates work?

A certificate puts the tax on the right person, and it has to be on file for the sale. Buy stock you will resell tax-free on a resale certificate, such as California's under CDTFA Regulation 1668 or Texas Form 01-339, and collect a valid resale or exemption certificate, in that state's format, from each customer who claims one. Without a valid certificate you may owe the tax yourself.

Supplies you use up in your own work are not for resale, so sales or use tax is due on them: back-bar product a salon uses on clients, rather than sells to them, is one example.

How often do I file, and what if I am behind?

The state assigns your frequency: monthly Texas filers file and pay by the 20th of the next month, quarterly New York filers by the 20th of March, June, September and December, and Florida returns are due on the 1st and late after the 20th. Local taxes stack on the state rate: Texas is 6.25% plus local tax of up to 2%, for at most 8.25% in total. As of Oct 2026.

If you should have been collecting, see a state and local tax (SALT) CPA before you contact the state. A voluntary disclosure agreement, made before the state contacts you, limits how many years back you pay and waives some or all penalties, but each state sets its own lookback, and sales tax you collected but never paid over is due in full. As of Oct 2026. Online sellers: see sales tax when a marketplace collects some of it.

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Questions owners ask

What is the sales tax nexus threshold in California?

More than $500,000 of combined sales of tangible personal property delivered into California in the current or preceding calendar year (Rev. and Tax. Code sec. 6203(c)(4)). Inventory stored there generally creates nexus on its own. As of Oct 2026.

Does New York count the number of sales as well as dollars?

Yes. New York requires both more than $500,000 of sales of tangible personal property delivered in New York and more than 100 such sales, in the immediately preceding four sales tax quarters (Tax Law sec. 1101(b)(8)(iv)). As of Oct 2026.

If a marketplace collects sales tax for me, do I still need to register?

Often, yes. The marketplace collects on sales made through it, but your own website and direct sales need your own registration once you have nexus. As of Oct 2026.

Do I charge sales tax on services?

Only where the state taxes that service. Texas taxes data processing on 80% of the charge, New York taxes repairs to real property, and New York City taxes beauty services at 4.5%. Check each state where you sell. As of Oct 2026.

What if I should have been collecting sales tax for years?

See a state and local tax CPA before contacting the state. A voluntary disclosure agreement, made before the state contacts you, limits how many years back you pay and waives some or all penalties; each state sets its own lookback, and tax you collected but never paid over is due in full. As of Oct 2026.

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