Short answer
After Wayfair (2018), 45 states + DC use economic nexus — a remote seller can owe sales tax with zero physical presence. Most states use a $100K revenue or 200-transaction threshold; some are higher. Each state sets its own filing frequency per client (monthly / quarterly / annual). Marketplace facilitator laws shift the collection obligation to Amazon / Etsy / eBay, but sellers may still need to file zero returns. The job is no longer "track sales tax" — it's "track nexus per client per state, register on time, file every cadence, and never miss a Voluntary Disclosure window when a client crosses retroactively."
Why multi-state sales tax went from boring to brutal in 2018
Before June 2018, the rule was simple: a state could only require sales-tax collection from sellers with physical presence in the state — a warehouse, an employee, inventory in a 3PL, or a salesperson visiting clients. Quill Corp. v. North Dakota (1992) had cemented physical presence as the constitutional bar.
Then South Dakota v. Wayfair, Inc. overturned Quill. South Dakota's law required out-of-state sellers to collect and remit sales tax if they had either $100,000 in sales or 200 transactions into the state. The Supreme Court ruled this constitutional — physical presence was no longer required. Within 18 months, every state with a sales tax had its own version of an economic nexus law.
For CPA firms, the practical effect was immediate and ongoing: e-commerce clients who sold in 30 states overnight had filing obligations in all 30. SaaS clients selling to customers in California, Texas, and New York started owing sales tax to states they'd never set foot in. And clients who'd been selling on Amazon for years had to figure out their position under the wave of marketplace facilitator laws that followed.
The four pillars of multi-state sales tax compliance
1. Nexus determination — does the client have to register at all?
Nexus is the connection between the seller and the state that creates a filing obligation. Two ways to trigger it:
- Physical nexus: Office, warehouse, employees, inventory (including 3PL or Amazon FBA), salespeople visiting, or in some states even attending a trade show. Physical nexus is binary — present or not. Once present, registration obligation usually starts immediately.
- Economic nexus: Threshold-based — typically $100,000 in sales OR 200 transactions in the state. Once crossed, the client must register and start collecting. Some states use only the dollar threshold (no transaction count) or higher dollar amounts (California, New York, Texas at $500,000).
Determining nexus requires per-state analysis based on each state's specific rules. The client may have nexus in 3 states based on physical presence and 12 more based on economic nexus — 15 total registration obligations.
2. Registration — getting the sales tax permit
Once nexus is determined, the client registers with each state's Department of Revenue:
- State registration portal: Each state has its own. Most allow online registration; processing time varies from instant (a few states) to 2 weeks (some states).
- Streamlined Sales Tax (SST): 24 states participate in the Streamlined Sales Tax Project, which allows registration in all 24 via a single online application. A massive time-saver if the client has nexus in multiple SST states.
- Cost: Most states are free to register. A handful charge a small fee ($10–$100).
- Sales-tax permit: The state issues a permit and assigns an initial filing frequency (typically based on projected tax liability).
3. Collection — charging the right rate
Sales-tax rates vary not just by state but often by city, county, and special district. Texas has roughly 1,500 distinct tax rates. Colorado has home-rule cities that set their own rates and rules. The seller is responsible for charging the correct combined rate based on the destination address (in destination-sourcing states) or the origin (in origin-sourcing states).
Most clients use sales-tax automation software (Avalara, TaxJar, Sovos, Vertex, Stripe Tax) integrated into their e-commerce platform or accounting system. The software calculates the rate at checkout, the client collects from the customer, and the funds go into a separate sales-tax liability account.
4. Filing and remittance — the recurring work
This is where the real work lives. Each state has its own:
- Filing frequency: Monthly, quarterly, semi-annual, or annual — set by the state based on the client's tax liability or revenue volume in that state.
- Filing deadline: Typically the 20th, 25th, or last day of the month following the period end. Varies by state.
- Filing form: State-specific return with line items for taxable sales, exempt sales, tax collected, and any deductions.
- Remittance method: Most require electronic payment (ACH debit or credit). Larger payments may require EFT.
A single growing e-commerce client with nexus in 25 states + monthly filing frequency in 5 of them + quarterly in 12 + annual in 8 = roughly 80 sales-tax returns per year for one client.
The marketplace facilitator wrinkle
Marketplace facilitator laws — now in every sales-tax state — require online marketplaces to collect and remit sales tax on behalf of their third-party sellers. If your client sells exclusively on Amazon or Etsy, the marketplace handles tax collection in most states.
But the wrinkle: the client may still need to register and file. Reasons include:
- Direct sales alongside marketplace sales: If the client also sells through their own website (Shopify, WooCommerce), they need to register and collect on those direct sales.
- States that require marketplace sellers to file: A handful of states require marketplace-only sellers to register and file zero returns reporting marketplace-facilitated sales separately. The list changes — verify per state.
- Other taxes: Even if sales tax is handled by Amazon, the client may owe state income tax, gross receipts tax, or franchise tax in states where they have economic nexus for income-tax purposes (which has its own thresholds, separate from sales tax).
The practical rule: assume "Amazon handles it" is wrong, verify per state, and document the conclusion.
The 5 most common ways US firms get this wrong
1. Tracking only the home state
Pre-Wayfair habit. The client grew, the firm didn't catch the threshold-crossing in California, Texas, and Florida, and now there's three years of unregistered activity. Fix: continuous nexus monitoring as part of every quarterly close, not an annual review.
2. "Amazon handles it" without verifying per state
Marketplace facilitator laws cover sales tax collection, but every state has nuances about whether the seller still needs to register or file. The client gets a notice from one state two years in asking why they haven't been filing zero returns.
3. Static threshold checks
The firm checked nexus once when the client onboarded. The client tripled in size 18 months later. The system never re-evaluated. By the time anyone noticed, the client had crossed thresholds in 8 new states.
4. Missing the filing-frequency change
States periodically reassess a client's filing frequency. A client who started as quarterly may be moved to monthly after crossing a tax-liability threshold. The state sends a letter; the client throws it in a pile; six months later, six monthly returns are missing.
5. No Voluntary Disclosure when retroactive crossing is found
If audit reveals the client crossed nexus 14 months ago and never registered, most firms just register going forward and hope the state doesn't notice. Better practice: file a Voluntary Disclosure Agreement (VDA) — anonymous initial submission, agreement to register and remit, lookback typically capped at 3–4 years, penalties usually waived. Most states have a formal VDA program with published terms.
How a CPA firm actually scales multi-state sales tax
Step 1: Build a per-client nexus matrix
For every client with multi-state activity, maintain a matrix: rows are states, columns are physical presence flag, YTD revenue, YTD transaction count, nexus status (None / Approaching / Triggered / Registered), and filing frequency. Update at least quarterly, automatically driven from the client's accounting data when possible.
Step 2: Auto-calculate filing deadlines per state per cadence
Once registered, each state's filing frequency drives the deadline. Annual filer: 1 deadline per year. Quarterly: 4. Monthly: 12. Across 15 states with mixed cadences, that's potentially 60–120 deadlines per year for one client. Each deadline needs to be in the deadline-tracking system, auto-calculated from the period-end + state-specific lag.
Step 3: Centralize the document trail
Every state gets a folder structure: registration certificate, login credentials (kept separately and securely), filed returns by period, payment confirmations, any correspondence. When a state notice arrives, you have the full history in one place.
Step 4: Set explicit responsibility
Multi-state sales tax usually falls between functional silos — bookkeeping says it's tax, tax says it's bookkeeping, partner says it's an admin issue. Pick one role and one named person responsible for the entire sales-tax workflow per client. Otherwise it falls through every time.
Step 5: Review nexus quarterly, not annually
Threshold-crossing happens in real time. Annual reviews catch a client a year late — sometimes after the state has already noticed. Quarterly review catches it within 90 days, usually before any state inquiry.
Where MyCPACRM fits
Multi-state sales tax in MyCPACRM is handled via custom service definitions — one per state, configured with the relevant filing frequency and deadline rule. Once configured per client, the system auto-generates filings on the right cadence with the right deadlines, fires reminders to clients and staff, and surfaces everything on the unified dashboard alongside federal IRS filings (1040, 1120, 1099, W-2) and Canadian CRA filings (T2, GST/HST).
The platform doesn't replace your sales-tax automation software (Avalara, TaxJar, Stripe Tax) — those handle the rate calculation and collection. MyCPACRM handles the practice-management layer: which clients are registered in which states, which deadlines are coming up, which returns are filed vs outstanding, and which clients need a nexus review next quarter. For a multi-state client base, it's the difference between a firm that proactively catches threshold-crossings and a firm that finds out via state notice.
Frequently Asked Questions
What is economic nexus and how did Wayfair change it?
Economic nexus is a state's authority to require a remote seller to collect and remit sales tax based purely on the seller's economic activity in the state — without physical presence. Before South Dakota v. Wayfair (June 2018), states could only require sales-tax collection from sellers with physical presence (warehouse, employees, inventory). After Wayfair, states can impose collection obligations based on revenue or transaction-count thresholds. Within 18 months, every state with a sales tax adopted some form of economic nexus.
What are the typical economic nexus thresholds?
Most states use either $100,000 in annual sales OR 200 transactions in the state. Some states have moved to $100,000 only (no transaction threshold). California uses $500,000. New York and Texas use $500,000. Some states have lower thresholds — Mississippi at $250,000, Connecticut at $100,000 / 200 transactions but with stricter definitions. The exact threshold and how it's measured (current year, prior year, rolling 12 months) varies by state.
What is a marketplace facilitator law?
A state law that requires online marketplaces (Amazon, Etsy, eBay, Walmart) to collect and remit sales tax on behalf of their third-party sellers. As of 2026, every state with a sales tax has marketplace facilitator legislation. The marketplace handles tax collection — but the seller may still need to register and file returns reporting marketplace-facilitated sales (especially if they also have direct sales).
How often do clients need to file sales tax returns?
Filing frequency in each state is set by the state department of revenue based on the client's tax liability or revenue volume in that state. Typically: monthly (highest volume), quarterly (mid-volume), or annual (lowest volume). Some states have semi-annual or semi-monthly. The same client can have different filing frequencies in different states based on activity in each.
How do CPA firms typically register clients in new states?
Each state has its own registration portal. Most can be done online, taking 15–60 minutes per state. Some states issue the sales-tax permit immediately; others take 1–2 weeks. The Streamlined Sales Tax (SST) Registration System lets you register in 24 SST member states in a single transaction — a significant time-saver. After registration, the state assigns a filing frequency and provides login credentials for ongoing returns.
What happens if a client has been over the nexus threshold without registering?
The client likely owes back tax, interest, and penalties for the unregistered period. Most states offer Voluntary Disclosure Agreements (VDAs) — the client comes forward, agrees to register and remit, and the state typically caps the lookback period at 3 or 4 years and waives penalties. VDAs require an anonymous initial submission and full disclosure. Without a VDA, audit exposure is open-ended (no statute of limitations until registration occurs in many states).
Should I register in all 45 sales-tax states even if my client is under threshold?
No. Registration creates filing obligations even when there's no sales tax to collect — most states require a "zero return" if you're registered. Only register where the client has crossed the nexus threshold (or where physical presence triggers nexus regardless). Track activity continuously and register the day you cross — not the day the state notices.