Most sales tax trouble for marketplace sellers does not come from ignoring the rules. It comes from believing a version of the rules that was true three years ago, or that is true for one channel and not the others. Below are six specific beliefs that cause real problems, and what is actually the case.
None of this is tax advice. Sales tax is state law, it changes, and the answer for your business depends on facts a generic article cannot know. Treat this as a list of things to ask a professional about.
1. Assuming marketplace facilitator laws mean you have nothing to file
Marketplace facilitator laws shifted collection and remittance for marketplace sales onto the marketplace. Amazon, Walmart, eBay, and the rest collect and remit the tax on sales made through their platforms in states where those laws apply. Sellers hear that and conclude they are done.
The collection obligation moved. The filing obligation frequently did not. Several states still expect a registered seller to file a return reporting those marketplace sales as exempt or as a deduction, even when the tax owed is zero. A zero return still has to be filed, and a missed zero return still generates a notice. Whether this applies to you depends on which states you are registered in and why, which is a question for your accountant or the state’s department of revenue directly.
The second half of this one: marketplace facilitator coverage does not extend to your own website. If you run Shopify alongside Amazon, the Shopify sales are yours to handle.
2. Treating economic nexus thresholds as permanent numbers
Sellers memorize a threshold, usually a dollar amount plus a transaction count, and then stop checking. The thresholds have moved repeatedly since the Supreme Court decided South Dakota v. Wayfair in 2018, and the direction of movement has mostly been toward simplification: several states have dropped their separate transaction-count trigger entirely, which changes the answer for low-price, high-volume sellers in particular.
A seller doing forty thousand dollars across three thousand small orders could have tripped a transaction-count threshold under the old rules and not trip anything under the new ones. A seller who registered years ago under a rule that no longer exists may now be filing in a state where they have no obligation, which is its own quiet cost.
The practical move is to recheck thresholds annually against each state’s own department of revenue page rather than a blog roundup, and to recheck after any year where sales mix changed meaningfully.
3. Thinking inventory stored in a state is irrelevant
Physical presence still creates nexus, and inventory is physical presence. If your goods sit in a fulfillment center, they sit somewhere. Sellers using FBA often do not know, and cannot easily find out, every state their inventory has been placed in, because placement is Amazon’s decision and it changes.
States have taken different positions on whether third-party fulfillment inventory alone creates an obligation, and some of those positions have been litigated. This is genuinely unsettled ground in places, which is exactly why it deserves a professional opinion rather than a confident answer from a seller forum. What is not in dispute is that the inventory placement reports exist and that you should pull them before assuming the question does not apply to you.
4. Confusing sales tax collected with revenue
This is an accounting error rather than a compliance error, but it produces compliance consequences. Sales tax collected is not income. It is money you are holding for a state. When it lands in the same deposit as your sales proceeds and nobody separates it, two things happen: the books overstate revenue, and the cash that should be reserved for remittance gets spent on inventory.
The settlement report is where this gets resolved, and marketplace settlement reports are dense enough that a lot of sellers never fully break them apart. Tools built for this problem exist across the category. A2X and Link My Books are both built around turning marketplace payouts into correctly separated journal entries, and ConnectBooks handles marketplace settlement reconciliation alongside its inventory and profit reporting for sellers syncing Amazon, Shopify, Walmart, TikTok Shop, and eBay into QuickBooks or Xero. Whichever route you take, the outcome you want is the same: tax collected sitting in a liability account, not buried in sales.
5. Assuming product taxability is uniform
Sellers price and forecast as though a sale is a sale. States disagree about what is taxable with a specificity that surprises people. Clothing is exempt in some states and taxed in others, and in at least one state the exemption depends on the price of the garment. Groceries, dietary supplements, over-the-counter drugs, and digital goods all have their own patchwork.
The consequence for a multi-category seller is that a single blended tax rate assumption in a financial model will be wrong, sometimes materially. If you sell into a category with known exemption complexity, the product tax codes you assign inside each marketplace matter, and they are worth auditing rather than accepting as configured.
6. Waiting until a notice arrives to deal with prior exposure
The instinct when a seller realizes they had an obligation they did not meet is to hope it goes unnoticed, or to register going forward and quietly ignore the back period. Registering forward without addressing the prior period can, in some states, be the thing that draws attention to the prior period.
Most states have some form of voluntary disclosure process, which typically involves approaching the state before it approaches you, in exchange for a limited lookback period and relief from some penalties. The terms vary by state and the eligibility rules are specific, often turning on whether the state has already contacted you. This is the single item on this list where the cost of getting professional help is most clearly worth it, because the decision has to be made before you take any action that forecloses the option.
Where to actually look things up
Two habits fix most of the above. First, when you want to know a rule, go to the state’s own department of revenue site rather than a secondary source, because secondary sources age badly and sales tax content ages faster than most. Second, for federal-side questions about how your business records and reports, the IRS Publication 334, Tax Guide for Small Business covers the recordkeeping baseline, and the Small Business Administration maintains general guidance on state-level obligations for new businesses.
Every item above starts the same way. You looked something up, you got the right answer, and then the state changed the rule or you added a channel and nobody went back to check. Put a recurring calendar entry on it, once a year, and most of this list stops being your problem.