Resources Blog E-commerce
by Sarah Craig June 30, 2026
If you run an e-commerce business, the second half of the year is when sales volume peaks, and when sales tax compliance gets complicated. Prime Day, back-to-school, Black Friday, Cyber Monday, the December holiday rush. It’s the season you’ve been building toward.
But higher sales volume doesn’t just mean more revenue. It means more sales tax complexity like new states where you need to collect sales tax, more states to file in, sales tax holidays to navigate, and filing deadlines stacking up all at once. We recently hosted a webinar with two members of our tax team, Senica and Katherine, both former state tax administrators, to walk through exactly what sellers need to know heading into H2. Here’s what they covered.
Sales tax compliance starts with one foundational question: where are you actually required to collect and remit sales tax?
The answer comes down to nexus , the legal connection between your business and a state that creates a tax obligation there. There are two types:
These thresholds vary by state. For example, California requires $500,000 in gross revenue before nexus kicks in. Connecticut requires both $100,000 in revenue and 200 or more separate transactions. Illinois requires either $100,000 or 200 transactions. Whether a state uses “and” or “or” changes everything about when your obligation begins.
The thresholds can also change, and states don’t always announce it with a lot of notice, something Katherine saw firsthand during her years at the Texas Comptroller’s office.
Many sellers start by tracking nexus exposure manually, logging revenue totals and transaction counts by state in a spreadsheet. It works when you’re selling in a handful of states at low volume. But the cracks show quickly as you scale.
A spreadsheet doesn’t send you an alert when you’re approaching a threshold. It doesn’t automatically pull in data from multiple sales channels. Senica notes from her time as a state auditor: by the time most businesses realize they’ve crossed a threshold, they’re already in an audit.
That window between crossing a threshold and getting registered matters. Once you hit nexus in a new state, the state expects you to start collecting. But you can’t legally collect without a permit, which means you need to register, receive your permit, and start collecting before that next sale. If you miss it, you’re on the hook for back taxes, penalties, and interest.
Sales tax holidays might sound like a compliance break, but Katherine, drawing on her background in state tax administration, calls them one of the most operationally complex events of the retail year.
If you’re selling back-to-school products, emergency preparedness supplies, or household appliances, this is something to plan for before the window opens, not after.
July is one of the busiest sales tax filing months of the year, and it catches sellers by surprise because it’s when monthly and quarterly due dates converge.
If you’re a multi-state seller, you might have a monthly filing due on the 20th in one state, a quarterly filing in another, and an annual return in a third. Scale that across six or eight states, each with its own form, its own portal, and its own due dates, and you’re looking at a serious time investment. And as Senica points out, the stakes are higher than usual: you’re filing on Q2 numbers, which for many sellers are the strongest of the first half of the year. Larger numbers mean errors are more expensive.
Filing manually means gathering your sales data by state, reconciling it, logging into each state’s portal, navigating their individual processes, over and over again. Every manual step is an opportunity for an error, and errors in sales tax filings come with financial consequences.
TaxJar’s AutoFile feature handles this end to end: preparing your returns based on your actual sales data and submitting them to each state automatically, on time, every time. In 2025, TaxJar filed 100% of customer returns on time.
A few things to do right now to prepare for July:
More sales volume in H2 means three concrete compliance risks:
TaxJar is built to handle all of this in the background by providing:
AI is genuinely powerful in this space. At TaxJar, we use AI to process large transaction volumes, monitor tax rate changes across thousands of jurisdictions, and automate workflows that would be impossible to run manually at scale. We track hundreds of thousands of rate and rule changes. AI is essential for doing that efficiently.
But AI is not a substitute for compliance expertise. Tax legislation is nuanced, and it can be difficult for a model to distinguish between a proposed ruling and one that’s in final regulation form. And as Katherine, who spent years running audits at the Texas Comptroller’s office, puts it plainly: “If an auditor asks you to justify a nexus determination, ‘the AI said so’ is not a defense.”
The right approach is a partnership: AI handles the volume and speed, human tax experts handle the precision. TaxJar’s team implements over 250 tax rule changes annually, reviewing AI outputs, catching edge cases, and making judgment calls on the complex situations that require real expertise.
When evaluating any compliance tech stack, the question isn’t “can AI do this?” It’s “does this solution have the right combination of automation and human oversight to actually keep me protected?”
Sales tax compliance is one of those things that feels manageable until it suddenly isn’t, and the second half of the year is when most sellers find that out the hard way.
If you’re approaching nexus thresholds in multiple states, selling across more than two or three channels, or heading into a high-volume season without automated compliance in place, now is the right time to make a change.
Start a free 30-day trial at taxjar.com , or schedule a demo to talk to someone on our team.
Webinar attendees submitted these questions during the live session. We’ve answered them here in case you have the same questions.
Yes, you cannot legally collect sales tax from customers without a sales tax permit. Once you’ve determined you have nexus in a state, the required sequence is to register for a permit then begin collecting.
Without knowing the thresholds, it’s not clear where you have met an obligation to collect sales tax. This is the first step to compliance, understand where you have to collect sales tax. You only have to collect sales tax in states where you’ve met a nexus threshold, so understanding these thresholds is key.
Possibly, yes. Etsy and other marketplace facilitators collect and remit sales tax on covered transactions in most states, which can satisfy your obligation for those sales. But there are three things to check: first, if you also sell through your own website or any direct channel, those sales aren’t covered by the facilitator’s remittance. Second, some states still require you to file returns even if the facilitator remitted on your behalf, you’d just show $0 collected on your own. Third, a handful of states require registration regardless of who’s remitting. If your sales run across multiple channels, it’s worth confirming exactly which transactions are covered and where you still have a filing obligation.
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