Determining where you're required to collect and pay tax is complicated. So, let's start simple.

If your company is registered in a state, you're required to collect and pay tax on transactions made in that state. But where is your company required to register? Well, it depends. Each state has its own set of rules. This idea is often referred to as nexus.

For example, if your company has an employee, warehouse, or other physical presence in a state, you likely have to register there. Then you need to start collecting and paying tax on transactions made in that state.

But what if you operate in one state and sell to a customer in another state? Well, if you sell through a marketplace such as Amazon or Etsy, the marketplace is likely responsible for collecting and paying the correct tax.

If you don't sell through a marketplace, then you have to figure out if you've crossed an economic threshold in the state you're selling to. Each state sets its own threshold — it might be a certain number of transactions, total sales, or a combination.

If your company crosses a state's economic threshold, you're required to register and then start collecting and paying tax to that state.

We help you monitor where your company is approaching economic thresholds. As your company grows and evolves, you need to keep track of where you're required to collect and pay tax.