Modern ecommerce companies can grow quickly. One viral moment or new consumer trend and sales can skyrocket.
But as revenue increases and excitement grows, sales tax management can easily get sidelined until a state notice arrives, or an auditor asks where you’re registered, and your team has to piece together the answers.
That doesn’t just create potential penalties; it can also complicate further growth. Keeping pace with the changing sales tax and VAT landscape becomes another operational challenge for a growing brand.
As an ecommerce brand navigating sales tax, it can be hard to know where to begin. State requirements evolve, and a single SKU can be treated differently across jurisdictions. So let’s walk through five common sales tax questions we get from growing ecommerce brands and break down how you can address them before sales tax becomes a bottleneck.
1. We sell on Shopify and Amazon. Isn’t sales tax already handled?
Platforms like Shopify and marketplaces like Amazon each cover parts of the sales tax lifecycle, but using them doesn’t automatically address all of your obligations. Gaps in your setup can create sales tax liability.
Shopify, for example, calculates sales tax at checkout and offers automated filing and tax payments as a separately paid service for eligible merchants. You’re still responsible for obtaining the required state registrations, configuring your setup, and confirming that it covers your sales channels and filing obligations.
Marketplaces like Amazon generally collect and remit sales tax on behalf of third-party sellers under marketplace facilitator laws. The rules vary by state, however, and you may still have registration and reporting obligations even when the marketplace handles collection. If you sell through a DTC store, run pop-ups, or operate a storefront alongside marketplace sales, you’ll also need to assess and manage the obligations associated with those direct sales.
Where a state requires marketplace sales to be reported on your return, you may need to include those sales and claim the applicable deduction or exclusion. Keep documentation showing that the marketplace assumed responsibility for collection and remittance.
2. Where do we actually owe? And when did the clock start?
Understanding your sales tax obligations starts with two questions: where does your business have exposure, and when did each state’s requirements begin to apply?
Sales tax obligations depend on nexus, which is the connection between your business and a state that can require you to collect and remit sales tax. Nexus can arise from physical presence or from meeting a state’s economic thresholds. Following the 2018 Wayfair decision, states can require online sellers to collect sales tax based on economic activity, even without a physical presence.
For ecommerce brands, physical presence can include employees, business locations, or inventory stored with a third-party logistics provider (3PL) or fulfillment partner. You don’t need to own the warehouse, and physical presence can create obligations even when sales are below a state’s economic nexus threshold.
To establish when the clock started, review historical sales across your channels alongside records showing when employees, inventory, or business locations first created a physical presence in each state. Compare those dates with the thresholds, measurement periods, and collection deadlines that applied at the time. Crossing an economic nexus threshold and being required to begin collection aren’t always the same date; the deadline depends on the state’s rules.
Before switching on tax collection, confirm the state’s registration requirements and obtain any required permit. If your review identifies past exposure, work with a tax professional to evaluate your options, including voluntary disclosure eligibility, before registering or contacting the state.
3. We should have been collecting and we weren’t. How bad is this?
Uncollected sales tax can be addressed, and the best time to get started is today. Taking action before a state identifies the issue and contacts you can preserve options for reducing penalties and limiting historical exposure.
At Anrok, many of the ecommerce brands we work with have sales tax to catch up on. The first step is to assess your historical exposure and work with a tax professional to determine the appropriate path forward. Before registering or contacting a state, evaluate whether a Voluntary Disclosure Agreement (VDA) is available and appropriate, since those actions can affect eligibility. From there, coordinate any disclosure process with registration and the start of correct collection to address past obligations and prevent new exposure.
A VDA is an agreement between a business and a state tax authority to resolve previously undisclosed tax obligations. Depending on the state and the business’s eligibility, it can limit how many years of back taxes the state will assess and waive certain penalties. The business generally still owes the underlying tax and interest for the covered period.
4. How do we know we’re charging the right tax on the right products?
In January 2026, Kim Kardashian’s SKIMS agreed to pay a $200,000 penalty to settle with New Jersey over allegations that it improperly charged sales tax on exempt clothing. New Jersey generally exempts clothing, including swimwear, from sales tax, a reminder that collecting too much can also create problems.
Misclassification risk runs both ways: undercollect for a certain category and your business may have to cover the liability out of pocket, with interest and penalties. Overcollect and you may have to navigate customer refunds, legal claims, and negative press.
Classification can be particularly complex for ecommerce brands. Clothing can be taxed differently across states. Food and supplement classifications can also vary, making products such as protein bars more complicated than they first appear. Bundles containing products with different tax treatments can add another layer of complexity.
Sales tax automation platforms, like Anrok, help map your product catalog to the right tax categories and apply the relevant rules across jurisdictions. Accurate product information and expert review of ambiguous categories help keep that setup aligned with what you sell.
5. How does this land in our books, and who on our team owns it?
The sales tax collected from customers isn’t revenue and does not belong to your business. Your business functions as a collection agent, and sales tax should sit in a current liability account until you remit it. This makes sales tax a finance operations challenge, in addition to a compliance one.
Sales tax management can become particularly complicated when selling on marketplaces like Amazon. As mentioned earlier, marketplaces generally collect and remit tax for sales on their platforms. Your records should distinguish those transactions from sales where your business collects and remits the tax, so you can reconcile activity accurately and meet any applicable reporting requirements.
Sales tax needs a clearly accountable owner. Depending on your team’s size, that may be a finance lead, controller, or founder working with an external accountant. Define who monitors obligations, coordinates registrations, reviews filings, reconciles balances, and responds to notices. Bookkeepers can support the accounting workflow, while questions about nexus, historical exposure, and voluntary disclosure may require specialist tax expertise.
Streamline your sales tax operations with Anrok
Solving sales tax is critical to scaling responsibly. But managing collection and remittance across product categories, distribution channels, and jurisdictions can quickly become overwhelming.
Growing ecommerce brands like IDA Sports are partnering with Anrok to streamline their sales tax operations. Anrok combines automation with in-house tax expertise to help businesses assess their obligations, manage registrations, automate filings and remittances, and reconcile sales tax across their operations. When questions arise, tax experts can help your team work through the details.
Learn more about how Anrok supports growing ecommerce brands.
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