You may have to file and pay sales tax with multiple states if you have a physical or economic nexus in each state.

A common example of an economic nexus is if your online store makes a certain number of sales (let’s say 200) or a certain amount of income in sales (say $100,000) from clients residing in Texas. You would need to pay sales tax in Texas even if your business is located and registered in another state.

A common example of a physical nexus is a store with multiple locations. If you have stores, employees, or warehouses in California, New York, and Florida, you may have to pay sales tax to all three states.

This link is to a helpful article that outlines each state’s economic and physical nexus laws.

Filing & Paying Sales tax in multiple states can be extremely overwhelming and is not something that I would recommend a business owner do themselves because it can be extremely time-consuming and difficult to keep up with. You can either utilize an accounting professional or a sales tax filing service like Alvalara or Taxjar.

If you would like 1-on-1 assistance with your sales tax, schedule a discovery call with me at https://calendly.com/pegasusaccounting to discuss your business’s specific needs.