Sales tax in the United States is administered state by state, and a business can acquire a collection obligation in a state where it has no building and no staff. The trigger is called nexus, and it is a question of activity rather than address.
Nexus is a threshold, not a location
A seller once needed a physical presence in a state before that state could require it to collect sales tax. A warehouse, a sales rep, or inventory sitting in a fulfillment center all created that presence.
States later added economic nexus, which is measured by sales into the state rather than by anything the seller owns there. Crossing a stated dollar or transaction threshold creates the obligation on its own.
The consequence is that a small shop in Ohio shipping to customers across the country can accumulate duties in several states without ever changing how it operates. Growth alone moves the seller across thresholds.
Collection is a duty, not a cost
Sales tax is levied on the buyer, and the seller acts as a collection agent for the state. The money passing through the business is not revenue and was never the seller's to keep.
That distinction matters because collected tax sits in the operating account between the sale and the filing date. A business that treats the balance as available cash is spending funds it owes.
Registration also creates a filing cadence, often monthly or quarterly depending on volume. The obligation to file continues even in periods where no taxable sales occurred.
Rates vary below the state level
Most states allow counties, cities and special districts to add their own rates on top of the state rate. The applicable rate can therefore differ between two addresses on the same street.
Sellers generally determine the rate by destination, meaning the buyer's shipping address governs. That pushes rate determination into the checkout process rather than into an accounting review afterward.
Taxability itself also varies. Groceries, clothing, digital goods and services are treated differently across states, so the same catalog can be taxed unevenly depending on where it lands.
Marketplaces changed who collects
Marketplace facilitator rules shifted the collection duty onto large platforms for sales made through them. A seller on such a platform often finds the tax handled without action on its part.
Those same sales may still count toward the seller's own thresholds in some states, which is a common source of confusion. Platform sales and direct sales are not always treated identically.
A business selling through both a marketplace and its own storefront can therefore have split obligations. One channel is covered by the platform while the other remains the seller's responsibility.
The rules move and vary by state
Thresholds, taxability categories and filing frequencies are set separately by each state and revised over time. Anything described in general terms will differ somewhere in the details.
Because the obligation is retroactive to the date nexus was created, a delayed registration accumulates exposure quietly. States assess the uncollected amount against the seller, not the buyer.
This is territory where a small business needs a state tax professional rather than a general rule, since the answer depends on where its customers are and what it sells.