U.S. Sales Tax Basics for New Businesses

U.S. sales tax is a state-and-local system.

Start with nexus, taxability, sales channel, and filing obligations rather than assuming one nationwide rule.

Important: This page provides general education, not legal, tax, accounting, financial, banking, insurance, immigration, or professional advice. Verify current requirements with official authorities where the business will actually operate.

By Evan J. Marwell · Reviewed August 6, 2026

Four separate sales tax questions

Does the seller have nexus? A connection with a state may arise from physical activity and, in some circumstances, economic activity.
Is the product or service taxable? States differ on tangible goods, digital products, software, services, food, shipping, and exemptions.
Who collects? A marketplace may collect on some transactions while the seller remains responsible for other channels and records.
What must be filed? Registration, collection, sourcing, exemption certificates, returns, remittance, and closure procedures are separate tasks.

Do not register everywhere “just in case”

Registration can create filing duties even during periods with no tax due. First identify where the business has activity, inventory, employees, contractors, events, affiliates, or sales that may create obligations. Then verify the current rule with each state authority or a qualified adviser.

Records to keep

Sales by state and sales channel.
Product or service taxability decisions.
Marketplace-collected tax reports.
Exemption and resale certificates.
Registration dates, filing frequencies, returns, payments, and notices.
Dates when thresholds or physical activities changed.