Crossed $100,000 in Shopify Sales? Here's What I'd Check First.

Reaching $100,000 in sales is a huge milestone for any ecommerce business. It's something worth celebrating.

But it's also a good time to start paying closer attention to sales tax.

Many business owners hear about the "$100,000 threshold" and immediately assume they need to register for sales tax everywhere. In reality, the answer is usually more nuanced.

Here are three questions I'd answer before taking the next step.

1. Where Are Your Sales Happening?

One of the biggest misconceptions about sales tax is that your total revenue determines your obligations.

In reality, most states look at your sales into that specific state. That's why reviewing your sales by state is one of the first things I recommend.

2. Does That Number Include Marketplace Sales?

If you also sell on Amazon, Etsy, Walmart Marketplace, or other marketplaces, don't assume those sales are treated the same everywhere.

Many states have marketplace facilitator laws, but the way marketplace sales factor into economic nexus can vary. Understanding your sales channels is an important part of evaluating your next steps.

3. When Did You Cross the Threshold?

Timing matters.

States don't all apply their thresholds the same way. Some look at the current calendar year, while others look at the previous or trailing 12 months. Knowing when you crossed a threshold can help you determine what action, if any, is needed.

Our Sales Tax Nexus Tracker lets you plug in your sales by state so you can see where you may have met a registration threshold and identify states that may need your attention.

Don't Let the $100,000 Number Scare You

Crossing $100,000 in sales doesn't automatically mean you need to register for sales tax in every state.

Instead, use it as a reminder to review your sales data, understand where your customers are located, and learn how the rules apply to your business. 

The more organized your records are today, the easier sales tax becomes as your business grows.