Dealing with sales tax in multiple states

I launched my first product on Tindie last year and was excited about offering some more products but my accountant has advised me that it is going to be a huge pain to get sales tax licenses in each state and that there are some states that I simply don’t want to be selling to. I’m operating my business as an LLC.

Since I’m doing this as a hobby and not making any meaningful amount of money from this, I’ve reluctantly put things on hold even though there are customers on a waitlist for my product to be available.

It would be so much simpler if I could just sell the products to a distributor in my own state and have them handle orders but of course this is far to low volume for that to make sense.

I was just wondering if others have had similar concerns and how they have addresses this.


Your accountant is correct that this is something you should think about. An increasing number of states are trying to get in on revenue from out-of-state sales (California is a major one, for example). If you search for " [state>] out of state sales tax," you’ll probably find a page at said state’s Tax and Revenue Department website (actual org. varies by state, of course). They should all have an FAQ section that give you a rough idea of their policies. From what I’ve seen, there are usually a) taxes on tangible goods sold by out of state sellers and b) some limit, above which the seller needs to get registered and collect tax. If you are in a state that charges sales tax and are buying things from out-of-state sellers who don’t collect it, then you may have to pay that tax yourself, especially if you run a business.

It’s all very complicated, of course, but that’s what accountants are for!

In most cases, it is the responsibility of the customer to report internet purchases on their state tax forms.
As far as I know, you only need to collect local sales taxes if you sell to someone within your state.

As for taxes, you can find a simple and quick way to fill out tax forms. I’m using PDFfiller. The tool is not free, but the price suits me for the most part.