Sales Tax for Online Sellers: State-by-State Guide 2026

February 19, 2026 · 18 min read

Sales tax is one of the most confusing aspects of running an online reselling business. After the 2018 Supreme Court ruling in South Dakota v. Wayfair, states gained the power to require out-of-state sellers to collect sales tax — even if you don't have a physical presence there. In 2026, the landscape has matured but remains complex. This guide breaks down everything you need to know.

The Basics: How Sales Tax Works for Online Sellers

Sales tax is a consumption tax imposed by states (and sometimes cities and counties) on the sale of tangible goods. As an online seller, you may be required to collect and remit sales tax in states where you have nexus — a legal connection that triggers tax obligations.

There are two types of nexus:

• Physical nexus: You have a warehouse, office, employee, or inventory stored in a state. If you use FBA (Fulfillment by Amazon), you likely have physical nexus in every state where Amazon stores your inventory.
• Economic nexus: You exceed a state's sales threshold — typically $100,000 in revenue OR 200 transactions in a calendar year. Some states use only a dollar threshold.

Marketplace Facilitator Laws: The Good News

Here's the silver lining: as of 2026, all 45 states with sales tax (plus DC and Puerto Rico) have enacted marketplace facilitator laws. This means platforms like eBay, Whatnot, Poshmark, Mercari, StockX, and Amazon are required to collect and remit sales tax on your behalf for sales made through their platform.

What this means for most resellers: If you ONLY sell on marketplaces, the platform handles sales tax collection for you. You generally don't need to register for sales tax permits or file returns for marketplace sales.

However, there are important exceptions:

• Your own website: If you sell through Shopify, WooCommerce, or your own site, YOU are responsible for collecting and remitting sales tax.
• In-person sales: Whatnot live shows are marketplace-facilitated, but if you sell at flea markets, conventions, or local meetups, that's on you.
• Some states have reporting requirements: Even if the marketplace collects, some states require you to file informational returns.

States With No Sales Tax

Five states have no state-level sales tax at all:

1. Alaska — No state tax, but some municipalities charge local sales tax (up to 7.5%)
2. Delaware — No sales tax at all
3. Montana — No sales tax (some resort area taxes)
4. New Hampshire — No sales tax
5. Oregon — No sales tax

If you only sell to buyers in these states, no sales tax applies. But realistically, you'll have buyers nationwide.

State-by-State Economic Nexus Thresholds

Below is a comprehensive table of economic nexus thresholds for all states with sales tax. Remember: if you sell only on marketplaces, the marketplace handles this. These thresholds matter when you sell on your own website or in person.

Key takeaway: Most states use the standard $100,000 or 200 transaction threshold. Notable exceptions include California ($500,000), New York ($500,000 AND 100 transactions), Texas ($500,000), Alabama ($250,000), and Mississippi ($250,000).

Sales Tax on Specific Product Categories

Clothing and Apparel

Several states exempt clothing from sales tax, which is great for fashion resellers:

• Fully exempt: Pennsylvania, New Jersey, Minnesota (under $200/item in MN)
• Partially exempt: New York (under $110/item), Massachusetts (under $175/item), Rhode Island (under $250/item)
• Taxable everywhere else

Coins and Precious Metals

Many states exempt gold, silver, and numismatic coins from sales tax — a huge benefit for coin resellers:

• Exempt in most states: Over 40 states now exempt precious metals and/or coins, often with a minimum purchase amount (e.g., $1,000+ in some states)
• Still taxable: New Mexico, Kentucky, Maine, Vermont, Hawaii, and a few others

Digital Goods and Trading Cards

Physical trading cards (Pokemon, MTG, sports cards) are taxable tangible goods in all states with sales tax. Digital goods vary widely by state.

How to Register and Collect Sales Tax

If you sell on your own website and have nexus in a state, here's the process:

1. Register for a sales tax permit in each state where you have nexus. Never collect sales tax without a permit — it's illegal in most states.
2. Configure tax collection on your platform (Shopify, WooCommerce, etc.)
3. Collect the correct rate — rates vary by city, county, and special districts. Origin-based states (like Texas) use YOUR location's rate; destination-based states (most others) use the BUYER's rate.
4. File returns on schedule — monthly, quarterly, or annually depending on your volume
5. Remit the tax collected to the appropriate state

Tools That Make Sales Tax Easier

Manual sales tax compliance across multiple states is nearly impossible. Here are the tools resellers use:

• TaxJar: Auto-files in all states, integrates with Shopify/WooCommerce/Amazon. Starts at $19/month.
• Avalara: Enterprise-grade but has small business plans. Best for high-volume sellers.
• TaxValet: Done-for-you service. They handle registration, filing, everything. Starts around $300/month.
• Manual filing: Free but time-consuming. Only viable if you have nexus in 1-3 states.

Common Sales Tax Mistakes Resellers Make

1. Collecting tax without a permit. Register FIRST, then collect. In some states, collecting without a permit is a misdemeanor.
2. Ignoring economic nexus. "I didn't know" is not a defense. States are actively auditing online sellers.
3. Forgetting about FBA nexus. If Amazon stores your inventory in 20 states, you potentially have nexus in 20 states.
4. Not separating marketplace vs. direct sales. Marketplaces handle their own tax. Don't double-collect.
5. Missing filing deadlines. Late penalties can be 5-25% of tax owed, plus interest.
6. Not keeping records. Keep detailed records of every sale, including buyer location, item type, and amount. You'll need this for audits.

What About Resale Certificates?

If you buy inventory to resell, you can (and should) use a resale certificate to avoid paying sales tax on your purchases. Here's how:

• Register for a sales tax permit in your home state
• Use your permit number on a resale certificate form
• Present it to suppliers, wholesalers, and even retail stores when buying inventory
• This is NOT tax evasion — it prevents tax from being collected twice (once when you buy, once when you sell)

Pro tip: Many states accept the Multistate Tax Commission's Uniform Sales & Use Tax Certificate, so you can use one form for purchases in multiple states.

Marketplace Facilitator Law Details

Here's exactly what marketplace facilitator laws mean for your platforms:

• Whatnot: Collects and remits sales tax on all US sales. You don't need to do anything for Whatnot sales.
• eBay: Collects and remits in all states with marketplace facilitator laws (all 45 + DC). Has since January 2020 for most states.
• Poshmark: Fully handles sales tax collection and remittance.
• Mercari: Collects and remits in all applicable states.
• StockX: Handles sales tax as marketplace facilitator.
• Amazon (FBA/seller): Collects and remits as marketplace facilitator.

State Audit Risk: Who Gets Audited?

States are increasingly targeting online sellers for audits. Higher-risk factors include:

• High volume of sales in a state without being registered
• Selling on your own website without collecting tax
• Discrepancies between 1099-K amounts and filed returns
• Operating in states known for aggressive enforcement (New York, California, Texas, Pennsylvania)

The good news: if you only sell on marketplaces, your audit risk is very low because the marketplace is the responsible party.

Action Steps for 2026

1. Determine your nexus. List every state where you have physical presence or exceed economic thresholds.
2. For marketplace-only sellers: Verify your platforms handle sales tax. Keep records of all sales anyway.
3. For direct sellers: Register for permits, set up automated collection (TaxJar or similar), and file on time.
4. Get a resale certificate. Stop paying sales tax on inventory purchases.
5. Consult a CPA. If you're doing $50K+ annually, a tax professional pays for themselves.
6. Track everything. Use tools like BundleLive's SnapList to track inventory and sales data for accurate tax reporting.

Frequently Asked Questions

Do I need a sales tax permit if I only sell on Whatnot and eBay?

Generally no, because these marketplaces collect and remit sales tax on your behalf. However, having a sales tax permit in your home state is still recommended so you can use a resale certificate when buying inventory.

What if I sell at local meetups AND online?

You need a sales tax permit in your state for the in-person sales. Online marketplace sales are handled by the platform. Keep these sales streams separate in your records.

Can I get in trouble for old sales where I didn't collect tax?

Statutes of limitations vary by state (typically 3-4 years). If you're concerned, consult a tax professional. Many states offer voluntary disclosure agreements (VDAs) that waive penalties for sellers who come forward on their own.

Is shipping taxable?

It depends on the state. About half of states tax shipping charges; the other half exempt them if listed separately from the item price. Marketplaces handle this automatically.