Sales tax basics for online sellers

In the US, sales tax is set by each state (and often cities and counties). You usually must collect it in states where you have "nexus": a strong enough connection. This guide is general information, not tax advice; check your state revenue department or an accountant.

• Physical nexus: you live, work, store inventory or have employees in the state. If you sell from your home state, you usually have nexus there.
• Economic nexus: you sell enough into another state. Since the 2018 Supreme Court case South Dakota v. Wayfair, states can require remote sellers to collect once they pass a threshold.

As of 2026 the most common threshold is $100,000 in sales into a state in a year. Some states are higher (California, New York and Texas use $500,000), and some still also count the number of transactions. Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax. Thresholds change, so check before you rely on them.

It depends on the state. Some states tax digital downloads, software or online courses, and others do not. Services are untaxed in many states but taxed in some. This is the area where software (like Stripe Tax) or an accountant saves the most time.

Many countries charge VAT or GST on digital products sold to their consumers, often from the first sale, through simplified registrations (for example the EU One-Stop Shop). Physical goods shipped abroad may owe import VAT and duties, usually paid by the buyer on delivery unless you collect them.

On the Taxes page in your Sellabo dashboard you can switch on automatic tax. Checkout then uses Stripe Tax in your own Stripe account to calculate and add the right tax for each buyer’s location. Before switching it on, open Tax in your Stripe dashboard, add your business address and the places you are registered. Stripe charges a small fee for Stripe Tax. You still file and pay the returns to each state; Stripe’s reports show what you collected.

• Register for a sales tax permit in your home state if it has sales tax
• Switch on automatic tax at checkout
• Watch your sales per state; register in a new state before you pass its threshold
• File returns on the schedule each state gives you (monthly, quarterly or yearly)