Omnichannel Sales Tax & VAT Compliance for Retailers

It depends on the state and often on the price of the item. Pennsylvania, New Jersey, and Minnesota exempt most clothing entirely. New York exempts clothing and footwear under a price threshold. Massachusetts and Rhode Island exempt clothing up to a per-item cap and tax only the amount above it. Other states tax clothing at the full rate. Footwear, accessories, protective equipment, and athletic wear are frequently carved out of the exemption even where general clothing is exempt. TaxDo maintains taxability at SKU level per state, including price thresholds and partial exemptions, and applies the correct treatment at checkout.

Product taxability is the rule set that determines whether a specific item is taxable, exempt, or taxed at a reduced rate in a given jurisdiction. It varies because every jurisdiction legislates its own categories — grocery food versus prepared food, dietary supplements versus candy, over-the-counter medicine, clothing, digital goods, and software. The same SKU can be exempt in one state, reduced-rate in another, and fully taxable in a third. Getting it wrong at SKU level is the most common source of retail sales tax assessments. Outside the US the same problem appears as EU reduced and super-reduced rates, UK zero-rating, and Canadian provincial divergence. TaxDo maintains taxability rules across 150+ jurisdictions and applies them per item, not per order.

In most states, yes. Owning inventory in a state creates physical presence nexus even with no employees or facility there. Amazon FBA redistributes inventory across its fulfilment centre network without seller approval, so an FBA seller can acquire physical nexus in a dozen states without taking any action. The same applies to third-party logistics providers and consignment arrangements. TaxDo tracks inventory locations against every state's physical presence rules alongside economic nexus thresholds, so registration obligations surface before an audit does.

Marketplace facilitator laws shift the obligation to collect and remit sales tax from the individual seller to the marketplace that processes the sale. Every US state with a sales tax now has these rules, and the EU applies equivalent deemed supplier rules for VAT. The complication for retailers is mixed channels: sales through a marketplace are usually collected by the marketplace, while sales through your own site remain your obligation, and some states still require you to report marketplace sales on your return even though you did not collect the tax. TaxDo applies facilitator rules per state, separates channels correctly, and reports marketplace-collected sales where required.

Sales tax holidays suspend tax on defined categories for a limited period, most commonly clothing, footwear, school supplies, computers, and emergency preparedness items, and most carry per-item price caps. The dates, qualifying categories, and caps change every year and differ by state. TaxDo maintains the current holiday calendar for every participating state and applies the exemption automatically at checkout for qualifying SKUs during the qualifying window, then reverts when it ends — with no manual configuration per event.

Economic nexus is the revenue or transaction threshold at which an online retailer must register, collect, and remit sales tax in a state without any physical presence there. Since the 2018 Wayfair decision every state with a sales tax enforces one. Most have standardised on a 100,000 US dollar revenue threshold, and several have removed transaction-count triggers entirely — Illinois did so on 1 January 2026. TaxDo tracks revenue and transaction counts against every state's current threshold and alerts before you cross, so registration happens on time rather than retroactively.

Retailers selling wholesale or B2B must hold a valid resale or exemption certificate for every exempt sale, or the sale converts to taxable with tax, interest, and penalty assessed to the retailer. TaxDo collects certificates at onboarding or checkout, validates completeness and jurisdiction validity before the exemption is applied, stores them against the customer record, tracks expiry, and triggers renewal. Multistate Tax Commission and Streamlined Sales Tax forms are supported alongside every state-specific format.

Yes. TaxDo manages VAT and GST registration and filing across 150+ jurisdictions, including EU One Stop Shop returns for B2C sales into the EU and Import One Stop Shop for consignments below the low-value threshold. Place of supply, destination VAT rates, distance selling thresholds, and import VAT treatment are applied automatically, and UK VAT and GST regimes are covered on the same platform.

Yes. Canada layers a federal GST with provincial systems that behave differently: HST provinces combine federal and provincial tax into one rate collected federally, while British Columbia, Saskatchewan, and Manitoba run separate PST regimes with their own registration rules, and Quebec administers QST separately again. Product taxability also diverges by province. TaxDo manages registration, calculation, return filing, and remittance for GST/HST, PST, and QST, and tracks provincial registration thresholds alongside US nexus in the same dashboard.

Yes. Consumer law in the EU, UK, Australia, and Japan requires displayed prices to include VAT or GST, while US retailers display prices excluding tax and add it at checkout. TaxDo runs both models natively. It back-calculates the tax component out of a gross price, holds a single price point constant across jurisdictions with different rates by absorbing the rate difference into margin, and applies each jurisdiction's rounding rules. Multi-currency settlement is handled on the same transaction.