Statutory Requirement: Under South Dakota v. Wayfair (2018), remote sellers exceeding individual state gross revenue ($100k - $500k) or transaction limits (100 - 200) must register for a sales tax permit before making further taxable sales. Failure to collect creates personal liability for company officers.
Phase 1: Economic & Physical Nexus Determination
Audit Trailing 12-Month Gross Receipts by State: Export all gross sales by shipping destination across all channels (Shopify, Amazon, Walmart, WooCommerce, direct invoices).
Audit Order / Transaction Counts: Check states with active transaction thresholds (e.g. New York: 100 orders AND $500k; Illinois, Georgia, Maryland, New Jersey: 200 orders OR $100k).
Identify Physical Nexus Triggers: Review 3PL warehouse inventory storage (Amazon FBA inventory, ShipBob), remote employees/contractors, and trade show attendance exceeding safe harbor days.
Review NOMAD State Exemptions: Confirm sales into New Hampshire, Oregon, Montana, and Delaware are exempt from state-level general sales tax.
Phase 2: Marketplace Facilitator Analysis
Isolate Marketplace vs. Direct Sales: Marketplace facilitators (Amazon, eBay, Etsy, Walmart) collect and remit on your behalf in 45+ states. However, marketplace revenue still counts toward triggering nexus for your direct Shopify/DTC store!
Reconcile 1099-K Forms with State DOR Filings: Ensure your reported gross revenues match credit card processor and marketplace 1099-K filings reported to state departments of revenue.
Phase 3: Back-Tax Remediation & Penalty Waiver (VDA)
Evaluate Historic Exposure Prior to Direct Registration: If you crossed a threshold 12+ months ago without registering, DO NOT register directly online without consulting a CPA. Direct registration triggers automated back-tax inquiries.
Initiate Anonymous Voluntary Disclosure Agreement (VDA): Have a CPA submit an anonymous VDA application. States routinely waive 100% of late-filing and negligence penalties and cap audit lookback to 36 months.
Phase 4: Automated Tax Engine Implementation
| Platform / Software |
Primary Use Case |
Filing Automation |
Status |
| Avalara AvaTax |
Enterprise multi-state omnichannel |
Full managed returns & remittance |
[ ] Configured |
| Stripe Tax |
SaaS & Stripe Payments users |
Real-time calculation & exports |
[ ] Configured |
| Anrok |
Subscription & B2B SaaS software |
Dedicated SaaS tax matrix |
[ ] Configured |
Document Ref: STND-CHK-2026
Published by SalesTaxNexusDirect.com