Since South Dakota v. Wayfair in June 2018, a US state can make an online seller with no office there collect its sales tax once sales into the state pass a threshold, such as $100,000 a year in South Dakota. Track your sales per state, register before you collect, then turn on collection for that state in your store settings.
| Term | What it means for a small store |
|---|---|
| Nexus | A link to a state strong enough that you must collect its sales tax |
| Economic nexus | Nexus created by sales volume alone, with no office or staff in the state |
| Remote seller | A seller generally without a physical presence in the state |
| Marketplace facilitator | A marketplace that collects and remits tax for the sellers it serves, where state law says so |
Updated
This guide is for small US sellers who ship to customers in other states. It explains what changed in 2018, how to find each state's own threshold, and where the tax switches live in Shopify and WooCommerce. It is general information, not legal or tax advice; a tax professional can confirm your position.
Enter each state's threshold from its own revenue department page. The first two rows are examples with made-up sales. Nothing is saved or sent.
If your orders export has a shipping state and an order total, one formula per state gives you the number to compare with the threshold.
Column C holds the shipping state and column F the order total. Change the state name for each row of your summary.
=SUMIF(C:C, "Kansas", F:F)In your Shopify admin go to Settings, then Taxes and duties, and click United States under Manage sales tax collection. Add each state where you are registered, enter the sales tax ID, and click Collect taxes.
Shopify's help says a location you create is used to determine nexus, not the store contact address, and recommends asking a tax professional or the state whether you need to collect.
WooCommerce leaves the rates to you or to a tax extension. Its standard rates table has columns for country code, state code, ZIP or postcode, city, rate percent, tax name, priority, compound, shipping and tax class.
The WooCommerce docs say they explain how the platform handles tax based on your settings, not when or what to charge, so the decision about where to collect stays with you.
On June 21, 2018, the Supreme Court upheld a South Dakota law covering sellers delivering more than $100,000 of goods or services into the state, or making 200 or more separate transactions there, and overruled the earlier physical presence cases, Quill and Bellas Hess.
No. The state guidance shows that from July 1, 2023 the test is gross revenue from sales into South Dakota exceeding $100,000 in the previous or current calendar year. Other states changed their tests too, so always check the current page.
Shopify says it does not remit or file your taxes unless you use Shopify Tax and set up automated filing. Otherwise it calculates and charges the tax, and filing is up to you.
In WooCommerce settings, under General, tick Enable tax rates and calculations. A Tax tab then appears, where you choose whether prices include tax and which address tax is based on, and add rates.
No. It is a plain summary of public sources as of October 2026. Sales tax rules change and depend on what you sell, so confirm with the state or a tax professional.
Related: Sales tax calculator, WooCommerce vs Shopify, Shopify pricing, How to start a Shopify store, Shopify product variants.
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