Top 3 eCommerce Sales Tax Mistakes Online Sellers Make

Managing eCommerce sales tax is one of the most confusing and overlooked aspects of running an online store. With rules that vary by state and constantly changing regulations, it's easy to make costly errors. Here are the top 3 mistakes online sellers often make—and how to avoid them.

1. Ignoring Economic Nexus Laws

Many sellers assume they only need to collect sales tax in their home state. However, economic nexus laws now apply in most U.S. states, meaning if your sales exceed a certain threshold (often $100,000 or 200 transactions), you may need to collect and remit sales tax there—even without a physical presence.

2. Incorrect or Incomplete Tax Collection Settings

Relying solely on default tax settings in platforms like Shopify or Amazon can lead to incorrect tax collection. Rates can vary by ZIP code, and not all products are taxed equally. It’s important to review and update your tax collection rules regularly.

3. Missing Filing Deadlines

Even if you collected the correct amount of sales tax, missing a state filing deadline can result in penalties and interest. Some states require monthly, quarterly, or even annual filings—so staying on schedule is key.

Struggling with sales tax compliance? At BSH Accounting, we help eCommerce sellers navigate multi-state sales tax, avoid mistakes, and stay audit-ready. Let us handle the details so you can grow with confidence.

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