Do Shopify, WooCommerce, or BigCommerce handle sales tax for me?

They calculate and can apply sales tax at checkout, but they don't register you with states or file your returns. You (or a tax service integration) still register, file, and remit.

What is the first state I should register in as a new seller?

Register in your home state first (where your office or warehouse is). Then register in states where you have crossed economic nexus, starting with the highest-revenue states — often California, Texas, Florida, New York.

How much does sales tax software like TaxJar or Avalara cost?

TaxJar starts around $19/month for small sellers; Avalara is typically $500+/month for SMB plans. Stripe Tax is pay-as-you-go (0.5% of taxable transactions). Quaderno is ~$49/month for SaaS-focused sellers. Costs scale with transaction volume.

What happens if I never register in a state where I owe tax?

You accumulate uncollected tax liability. When the state discovers you (audit, customer complaint, 1099-K reporting), you owe back tax plus penalties (often 25%) plus interest. Voluntary disclosure programs in most states let you limit the lookback period if you come forward proactively.

Getting Started with Sales Tax for E-commerce

Updated 2026-05-11

A practical guide for e-commerce sellers (Shopify, Amazon, WooCommerce, BigCommerce) on registering, collecting, and filing US sales tax.

Who this guide is for

This guide is for US-based and foreign e-commerce sellers who ship physical products to US customers. If you sell on Shopify, Amazon FBA, WooCommerce, BigCommerce, Etsy, eBay, or a custom store and you're wondering where you need to collect sales tax — this is your starting point.

Step 1 — Identify where you have nexus

Map every state where you have physical presence (employees, offices, inventory) and every state where your gross sales or transaction count exceed the state's economic nexus threshold. Amazon FBA is a common surprise: FBA warehouses give you physical nexus in every state where Amazon stores your inventory.

State-specific checkpoints

After the broad nexus pass, open the state pages that match your channel mix: direct sellers can start with Florida e-commerce, threshold reviews with Colorado thresholds, Shopify stores with Indiana Shopify, SaaS bundles with Indiana SaaS, digital catalogs with New Hampshire digital products, and smaller-channel checks with Rhode Island Shopify.

Step 2 — Register with each state's DOR

Register with the state Department of Revenue (DOR) for a sales tax permit. Most states let you register online within 15-30 minutes. The DOR will assign you a filing frequency (monthly, quarterly, or annually) based on your expected tax liability.

Step 3 — Configure collection in your store

Shopify, WooCommerce, and BigCommerce all have built-in tax calculation tools that can handle state rates once you turn on the state. For multi-state complexity and local rate accuracy, a dedicated tax service (TaxJar, Avalara, Stripe Tax) is worth the subscription cost — especially if you cross 10+ states.

Step 4 — File returns on schedule

Missing filing deadlines is the most common source of penalties. Even zero-tax returns need to be filed if you're registered. Automated filing through TaxJar/Avalara/TaxValet eliminates the manual work but still requires you to review returns before they go out.

Frequently asked questions

Do Shopify, WooCommerce, or BigCommerce handle sales tax for me?: They calculate and can apply sales tax at checkout, but they don't register you with states or file your returns. You (or a tax service integration) still register, file, and remit.
What is the first state I should register in as a new seller?: Register in your home state first (where your office or warehouse is). Then register in states where you have crossed economic nexus, starting with the highest-revenue states — often California, Texas, Florida, New York.
How much does sales tax software like TaxJar or Avalara cost?: TaxJar starts around $19/month for small sellers; Avalara is typically $500+/month for SMB plans. Stripe Tax is pay-as-you-go (0.5% of taxable transactions). Quaderno is ~$49/month for SaaS-focused sellers. Costs scale with transaction volume.
What happens if I never register in a state where I owe tax?: You accumulate uncollected tax liability. When the state discovers you (audit, customer complaint, 1099-K reporting), you owe back tax plus penalties (often 25%) plus interest. Voluntary disclosure programs in most states let you limit the lookback period if you come forward proactively.