Selling online and showing up at expos is exciting—new customers, new markets, real momentum. The part that tends to sneak up on people is sales tax compliance. This guide breaks down what triggers tax obligations, what marketplaces handle for you, and practical steps to stay ahead of it.
Why Sales Tax Compliance Matters More Than Ever
After the 2018 South Dakota v. Wayfair decision, states can require out-of-state sellers to collect and remit sales tax based on economic activity—even without a physical presence. That trigger is commonly called economic nexus.1
As of January 1, 2026, every state with a statewide sales tax has an economic nexus standard for remote sellers, but the thresholds vary by state.1 Many states use a $100,000 sales threshold; some set higher thresholds (for example, Mississippi has used a $250,000 standard, and New York uses a higher sales threshold paired with a transaction count).1
A lot of older summaries say “$100K or 200 transactions.” That’s still true in some places, but more states have been removing transaction-based thresholds in recent years (Illinois removes its 200-transaction threshold on January 1, 2026).2
And yes—noncompliance can get expensive. Penalties and interest vary by state, but late filing / late payment penalties, interest, and audit time can add up fast.3 The goal isn’t perfection on day one; it’s building a system that keeps you out of the danger zone.
Think of sales tax as a “scaling tax.” The more places you sell, the more important it becomes to track where you’re creating obligations.
The Special Challenge for Event & Expo Vendors
If you travel to trade shows, craft fairs, festivals, pop-ups, or wholesale events, you introduce a second trigger: physical nexus. In many states, showing up to sell (or sometimes even taking orders) can create a tax obligation immediately—regardless of your economic nexus thresholds.4
What “physical nexus” can mean
- Registering for a permit before the event
- Collecting sales tax at the booth
- Filing a return after the event (even if it’s a “zero return”)
- Keeping event records in case the state asks later
State rules vary—by a lot
In some states, once you establish physical nexus, you may be expected to collect tax on taxable sales delivered into that state beyond the event itself. This is highly state- and fact-dependent, but it’s a reason to treat event selling as a serious nexus trigger.4
Marketplace Facilitator Laws: The Good News (With a Catch)
Most sellers get real relief from marketplace facilitator laws. These rules generally shift sales tax collection on marketplace transactions to the platform (think Amazon, Etsy, eBay, Walmart Marketplace). Avalara’s state-by-state guide notes that states with sales tax have adopted marketplace facilitator requirements, though details vary by state.8
Even when a marketplace collects/remits for marketplace orders, sellers can still have responsibilities such as: tracking nexus across all channels, collecting tax on direct website sales, and in some states registering and filing returns (including potential “zero returns”) depending on the state’s rules and your activity.8
Also: not every U.S. jurisdiction fits neatly into “statewide sales tax.” Alaska has no statewide sales tax, but local jurisdictions may impose it and some have coordinated remote-seller programs.9
Solutions for Shopify Sellers
1) Shopify Tax (calculation)
Shopify Tax is free for the first $100,000 in global sales per calendar year, then charges a small calculation fee on orders in states where tax collection is enabled (with per-order caps).10 Shopify’s documentation also emphasizes that it remains the merchant’s responsibility to ensure correct tax setup and compliance.11
2) Filing: Shopify add-ons vs. third-party filing
Calculation is only one piece. Filing returns (and sometimes registrations, exemption certificates, and notices) is where many businesses decide to use a dedicated tax service provider—especially once they’re multi-state or multi-channel.
When Shopify-first works well
- You mostly sell through Shopify (not many other channels)
- You’re registered in only a few states
- Your products/taxability rules are straightforward
When third-party tools shine
- You sell multi-channel (Shopify + marketplaces + in-person)
- You need stronger nexus monitoring across channels
- You want more robust compliance workflows (certs, notices, audit support)
3) Streamlined Sales Tax (SST) as a cost lever (when it fits)
If you’re operating in multiple states, SST can reduce friction in participating states. SST is not nationwide—there are 24 member states—but it can be meaningful for sellers with wide geographic distribution.12
Let’s Help Each Other Navigate This
Sales tax can feel like a maze—especially when you’re also trying to ship orders, manage ads, build products, and (you know) run the business. But the community knowledge here is powerful.
- What states have you registered in—and what surprised you about the process?
- Any tools/services you’d recommend (or avoid)?
- If you do events/expos, how do you handle temporary permits?
- Have you been audited? What did you learn that would help others?
- What’s still confusing in your setup right now?
Drop a comment with your experience, your questions, or your “here’s what I wish I knew earlier.” Odds are someone else is dealing with the exact same thing.
Action Steps to Get Started
- Audit sales by state for the last 12 months across all channels (Shopify, marketplaces, POS/events).
- Identify nexus triggers: economic (thresholds) and physical (events, inventory, employees, etc.).1
- Prioritize registrations where you’re clearly over threshold or have physical presence.
- Turn on accurate tax calculation at checkout (Shopify Tax or a third-party engine).10
- Set monitoring to alert you before you cross thresholds (especially if you’re scaling fast).
- Build a filing workflow: calendar deadlines + reports + who files (you, CPA, or automated service).
- Document everything: permits, returns, marketplace reports, event dates/locations, exemption certificates (if applicable).
State rules change frequently. Treat any “state-by-state” summary (including this post) as a starting point, then confirm specifics with the state, your CPA, or a SALT professional—especially before registering in a new state or attending a major event.11
Final Thoughts
Staying compliant doesn’t mean doing everything perfectly from day one. It means staying informed, taking reasonable steps, and tightening the system as your business grows.
What’s been your biggest sales tax challenge lately? Comment below—let’s solve it together. 💪
Sources
- Sales Tax Institute — Economic Nexus State-by-State Chart (as of 1/1/2026). ↩
- Avalara — States eliminating economic nexus transaction thresholds, and Sales Tax Institute — Illinois removes transaction threshold effective 1/1/2026. ↩
- Sales.tax — Sales tax penalties explained (examples by state). ↩
- Sales Tax Institute — Sales tax nuances of trade show attendance, and Avalara — How attending trade shows can affect sales tax. ↩
- TaxJar — State-by-state guide to sales tax at craft fairs and festivals (Connecticut example). ↩
- Colorado Department of Revenue — DR 0589 Special Event Sales Tax Application (license fees). ↩
- California CDTFA — Temporary Sellers (temporary seller’s permits). ↩
- Avalara — State-by-state guide to marketplace facilitator laws. ↩
- Sales Tax Institute — Western states sales tax trends (Alaska local/remote seller notes). ↩
- Shopify Help Center — Shopify Tax pricing, and Shopify — Shopify Tax overview. ↩
- Shopify Help Center — Shopify Tax documentation (responsibility note). ↩
- Stripe — Streamlined Sales Tax guide (24 member states). ↩
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