How to Handle Multi-State Sales Tax Compliance

TLDR: Selling in more than one state means navigating different tax rates, thresholds, and deadlines. It’s easy to get overwhelmed, but if you track sales by state, automate collection, and stick to a filing calendar, you can stay on top of it. doola helps you manage multi-state compliance end-to-end so you avoid penalties and stay focused on growth.

Why Multi-State Compliance Is So Complicated

Expanding into new states is a sign of growth—but it also means your sales tax responsibilities increase.

Each state has its own rules for:

• Tax rates
• Nexus thresholds
• Filing frequencies
• Exemptions and product categories

Some states require monthly filings, while others only ask for quarterly or annual returns. If you store inventory in multiple states (like through Amazon FBA), you may also trigger physical Nexus in places you didn’t expect.

What starts as simple tax filing in one state can quickly turn into a web of conflicting deadlines and obligations.

How to Stay Organized Across States

Track Where You Cross Nexus Thresholds

You need to know where your business activity—sales revenue or number of transactions—has triggered economic or physical Nexus. Without this, you won’t know where to register or file.

Set Up Automated Sales Tax Collection

Tax rates vary not only by state but also by county and city. Relying on manual calculations or default platform settings is risky. You should ensure your checkout process is set up to automatically collect the correct rate.

Use a Centralized Filing Calendar

Each state has its own schedule. Missing a due date—even with $0 tax owed—can lead to late fees and compliance issues. Using a calendar or a filing system to track all deadlines is essential for multi-state sellers.

How doola Makes Multi-State Compliance Simple

Managing tax compliance manually across 5, 10, or 20 states is time-consuming and error-prone. doola helps you streamline this process.

Here’s how:

• We identify where you have Nexus based on your sales, inventory, and business activity
• We register your business for sales tax permits and reseller certificates in all necessary states
• We handle recurring filings and keep you compliant with every deadline

Whether you’re selling through Shopify, Amazon, or both, doola ensures every part of your compliance process is synced and automated—so you never miss a step.

👉 Book a free demo with doola

FAQs

What makes multi-state sales tax so complex?

Each state has different tax rates, filing schedules, and Nexus rules. Managing them manually becomes a challenge as your business scales.

How do I know if I have Nexus in a state?

You may have Nexus if you surpass a revenue or transaction threshold (economic Nexus) or store inventory or employ people there (physical Nexus).

What happens if I miss a filing deadline?

Missing a sales tax filing can result in penalties, interest, or even losing your sales tax permit. You must file on time, even if no tax is due.

Can doola handle compliance across all states?

Yes. doola manages everything – from identifying where you have Nexus, registering in each state, to filing returns on your behalf.