You Don't Need a Building to Owe Taxes
What is it?
Economic Nexus is a legal concept that says you owe sales tax in a state if your sales revenue or transaction volume exceeds a certain threshold there, even if you have no physical office or warehouse.Why is it important?
Before 2018, you only collected tax where you had a physical presence. Now, if you sell $100,000 worth of t-shirts to customers in California, California wants you to collect sales tax. Ignoring this can lead to massive audits and back-taxes.The General Rule (The 100/200 Rule):
While every state is different, a common trigger is:
- $100,000 in sales OR
- 200 individual transactions in that state within a year.
Action Step: Check your Shopify Analytics report 'Sales by location' (filter by US State). If you are nowhere near these numbers in any state, you generally don't need to worry yet (except for your home state). If you are close, it's time to consult a tax pro.
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This comprehensive masterclass (7.8.2 - US Sales Tax for E-commerce (Difficulty: Advanced | Path: Scale)) is locked. Upgrade your plan to unlock the full technical roadmap.
Curriculum: 7.8.2 - US Sales Tax for E-commerce (Difficulty: Advanced | Path: Scale)
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