- Track your sales: Use tools or systems to monitor your sales and keep an eye on when you cross nexus thresholds in various states. We’ve created a comparison guide that covers several tools we use with our clients, which you can check out here.
- Register promptly: Ideally, you should register as soon as you hit a state’s sales threshold. However, not all states require you to register immediately after your first transaction.
- Stay organized: Maintain accurate and detailed records of your sales and state registrations so you’re always prepared in case a state requests information.
- Stay informed: States often change their rules, so make sure you’re up to date with the latest regulations.
The bottom line? Don’t wait for a state to come after you—it’s far more costly that way. A bit of proactive preparation now can save you from major headaches down the road.
How to Protect Your eCommerce Business from State Sales Tax Enforcement Pitfalls
The key to protecting your e-commerce business starts with staying ahead of your sales tax obligations.
Regularly monitor your sales and activities to know exactly when and where you’ve triggered nexus in different states.
Leverage tools or work with professionals (like BW Partners) to track your sales data across platforms like Amazon, Shopify, and eBay, ensuring you’re staying on top of your obligations. Given the constant changes in state laws, staying informed is critical—what worked last year may not apply today.
Equally important is maintaining detailed, organized records of your sales, registrations, and filings. These will serve as your first line of defense if a state questions your compliance.
If you’re uncertain about your current status, consider conducting an internal audit of your processes and data, or even pursuing a Voluntary Disclosure Agreement (VDA) to correct any potential issues proactively.
Taking these steps now can help you avoid costly audits, back taxes, and penalties in the future—allowing you to focus on growing your business rather than dealing with red tape.
For a comprehensive, up-to-date checklist of what to focus on, download our End of Year Sales Tax Checklist. It covers:
- Recent changes in Shopify’s tax engine
- Voluntary Disclosure Agreements (VDAs)
- Reviewing your nexus footprint
- Checking sales tax rates and product taxability
- Managing use tax
- Exemption certificates
- CO & MN retail delivery fees
- Sales tax license renewal requirements
- Recent transaction threshold updates
- Changes in the taxation of digital goods
Don’t be caught off guard—download the checklist today to ensure you’re compliant across all areas.
Let BW Partners Lift the Sales Tax Burden Off Your Shoulders
Sales tax compliance doesn’t have to feel like an impossible puzzle, but for many e-commerce businesses, it can seem that way. Keeping track of everything—nexus rules, registration requirements, and constantly changing state laws—can be overwhelming, and errors can be costly.
That’s where BW Partners comes in.
We specialize in helping e-commerce sellers like you navigate the toughest sales tax challenges. Here’s how we can help:
- Nexus Analysis: Not sure where you need to register? We’ll analyze your sales, inventory, and business activities to pinpoint exactly where you have sales tax obligations.
- Registrations: Whether you need to register in one state or several, we handle the entire process for you. From submitting applications to providing state-specific documentation, we ensure your registrations are timely and accurate, preventing delays and reducing headaches.
- Backfilings: If you’ve fallen behind on sales tax filings, we’ll help you catch up. Our team will efficiently and accurately file past-due returns, minimizing penalties and bringing your business back into compliance.
- Amended Returns: Made an error on a previously filed return? No worries. We can help correct mistakes, whether they involve misreporting, miscalculations, or missing data. Proper amendments safeguard your business and keep your records accurate.
- Audit Support: Sales tax audits can be stressful, but we’re here to help. If you’re facing an audit, we’ll handle communication with auditors, provide necessary documentation, and ensure your business’s interests are protected at every step.
- Voluntary Disclosure Agreements (VDAs): If you’re behind on compliance, we’ll negotiate with states on your behalf to reduce penalties and back taxes.
- Comprehensive Sales Tax Services: From registrations and filings to ongoing compliance, we manage it all so you can focus on growing your business.
Sales tax doesn’t have to keep you up at night. Let us take care of the complexity while you stay confident and compliant.
Ready to reduce your stress?
Reach out to BW Partners today and get back to running your business with peace of mind!
***Add Hyperlink to BW Partners to it opens up an email hi@bwpartners.net
Article 2 “Shopify Tax Changes & What They Mean for Shopify Users”
If you’re a Shopify Plus user currently using AvaTax, the upcoming Shopify tax changes will affect how you manage sales tax compliance, and it’s more than just a simple switch.
Starting April 30, 2025, Shopify will discontinue its old Avalara integration (previously owned and managed by Shopify) and introduce two new options:
- Shopify Tax (Shopify’s own tax engine)
- The new Avalara for Shopify integration (which uses the AvaTax tax engine)
While this might seem straightforward, many sellers are feeling confused about the shift.
Don’t worry—we’ve broken down what this change means for you so that you can choose the option that best suits your business needs.
Sales Tax Compliance: A Quick Overview
Before we dive into the details, let’s set the stage.
If you’re selling online, you’re already aware that sales tax compliance is inevitable.
For platforms like Amazon, Etsy, and eBay, marketplace facilitators handle sales tax on your behalf. However, once you start selling directly through your own website—such as via Shopify—you’re responsible for collecting and remitting sales tax for those transactions.
To streamline the ordering process for your customers, you’ll need to choose a sales tax engine that can calculate the correct tax based on where the orders are being shipped.
Options Previously Available to Shopify Sellers
For years, Shopify relied on Avalara’s AvaTax for Shopify as the core of their tax tool, effectively “borrowing” Avalara’s engine to handle sales tax calculations, even though Shopify owned and managed the integration.
The AvaTax product was bundled into the Shopify Plus subscription.
Behind the scenes, while Shopify had access to AvaTax, they were simultaneously developing their own tax engine—Shopify Tax—which launched in 2022. Initially, Shopify Tax was limited to calculating sales tax for U.S. transactions only.
Now that Shopify has fully developed and rolled out Shopify Tax, they are essentially returning the ownership of the AvaTax for Shopify product to Avalara.
There will still be an Avalara for Shopify integration, but Avalara will now take full control of that product.
