Navigating Sales Tax Nexus for E-Commerce Brands Selling on Multiple Platforms

Let’s be honest. For an e-commerce brand, the thrill of seeing orders roll in from Amazon, Shopify, Etsy, and eBay is hard to beat. It’s growth. It’s validation. It’s… a potential tax compliance nightmare waiting to happen.

That’s the tricky thing about multi-platform selling. Each new marketplace, each new fulfillment method, can quietly trip a wire called sales tax nexus. And suddenly, you’re on the hook for collecting and remitting sales tax in a state you’ve never even visited.

Here’s the deal: navigating this isn’t about memorizing every tax code. It’s about understanding the triggers. Think of nexus like a tripwire—invisible until you step on it. Our job is to map out where those wires are.

What is Sales Tax Nexus, Really?

At its core, “nexus” is just a fancy legal term for a “significant connection” to a state. Once you have it, that state requires you to collect its sales tax from customers located there.

The old rule was simple: you needed a physical presence—a store, an office, a warehouse. But a 2018 Supreme Court case, South Dakota v. Wayfair, Inc., changed everything. Now, economic activity alone can create nexus. Sell over a certain dollar amount or number of transactions into a state? You’ve likely got nexus there. The thresholds vary, but they’re the new reality.

The Multi-Platform Nexus Trap

Selling on one platform is complex enough. But when you layer platforms, the nexus triggers multiply. It’s not just about where you are. It’s about where your platforms, your inventory, and your partners are.

1. Inventory Nexus: The Fulfillment Center Factor

This is a big one. If you use Fulfillment by Amazon (FBA), Walmart Fulfillment Services, or a third-party logistics provider (3PL), your inventory is likely sitting in warehouses across the country. Each of those states will consider that physical inventory a nexus-creating presence.

You might not know which warehouse your products are in—the platforms move stock dynamically. But the tax authorities don’t see that as an excuse. It’s your responsibility to track it. Honestly, this is the most common way small to mid-sized brands accidentally create nexus.

2. Marketplace Facilitator Laws: A Double-Edged Sword

Here’s some good news. Most large platforms (Amazon, eBay, Etsy, etc.) are now considered “Marketplace Facilitators” in most states. This means they handle the sales tax collection and remittance for sales made through their platform. It’s a huge relief.

But—and there’s always a but—it’s not universal. A few states still have quirks. More importantly, facilitator laws do not absolve you of nexus itself. The platform collects the tax, but you still have the obligation to register, file returns, and often report those facilitator-collected taxes. It’s like having a friend pay your rent; you still need to make sure the landlord gets it and has the right paperwork.

3. Affiliate & Referral Programs: The Silent Nexus Creator

Do you work with influencers or affiliates in other states? If they earn a commission for driving sales, some states consider that a “click-through nexus.” Their physical presence can become your problem. It’s a less common trigger, but one that can sneak up on brands investing in influencer marketing.

A Practical, Step-by-Step Navigation Plan

Okay, so it’s complex. What do you actually do? Panic isn’t a strategy. Here’s a manageable approach.

Step 1: The Nexus Audit (Time to Dig In)

Gather data from all your sales channels for the past year. Look at two things for every state:

• Revenue & Transaction Counts: Compare them to each state’s economic nexus thresholds (often $100,000 in sales or 200 transactions).
• Physical Presence: List every location where you have inventory (check your FBA and 3PL reports), employees, or even remote contractors that could be considered an agent.

This audit is your map. It shows where you’ve already tripped the wires.

Step 2: Registration & Setup

Once you identify nexus states, you must register for a sales tax permit in each. Do this before you start collecting tax. Collecting without a permit is illegal. This process can be bureaucratic—so factor in time.

Step 3: Configure Your Tech Stack

This is where you lean on software. A good e-commerce platform or a dedicated sales tax automation tool can:

• Calculate the correct rate at checkout (by ZIP+4, not just ZIP code).
• Apply product-specific taxability rules (clothing is taxed differently in PA than in MN, for instance).
• Separately track marketplace-facilitated sales vs. direct sales.

Your goal is to automate the calculation. The filing? Well, that’s often the next hurdle.

Step 4: Filing & Remittance: The Ongoing Rhythm

Filing frequency (monthly, quarterly, annually) is set by the state. You’ll file a return even for periods with no sales or where all tax was collected by a marketplace. You’re essentially reporting that activity. Missing a filing can lead to penalties, even if you owe zero tax.

Consider this rough table of what you’re managing:

The Human Element: It’s Okay to Feel Overwhelmed

Look, this stuff is dry. It’s complicated. If you feel like you’re building the plane while flying it, you’re in good company. Most growing brands hit this wall. The key is to move from reactive to proactive.

Set a quarterly reminder to re-evaluate your nexus footprint. Growth changes everything. That new marketing push that worked amazingly in Texas? It might have just pushed you over their economic threshold.

And know when to get help. A CPA or tax attorney who specializes in e-commerce isn’t an expense; they’re a risk mitigation tool. They can help you navigate gray areas, like trade show attendance or pop-up shops, which can also create temporary nexus.

Wrapping Up: Compliance as a Competitive Edge

It’s tempting to see sales tax as a burdensome cost of doing business. A necessary evil. But what if you flipped that script?

Getting nexus and tax right is a sign of maturity. It means you’re paying attention to the details that separate a hobbyist from a real, scalable brand. It protects you from massive back-tax bills and penalties that could cripple your growth. In a way, understanding these complex rules is a silent competitive advantage—it allows you to expand fearlessly, onto new platforms and into new markets, with a solid foundation underfoot.

The landscape isn’t getting simpler. But your approach to it can. Start with the map. Audit your nexus. Automate what you can. And build this compliance into your growth story, not as an afterthought, but as a cornerstone.