If I were in your shoes, the very first thing I'd do is a sales tax nexus study. Before you worry about software or remittances, you absolutely have to know where you're legally required to collect tax. It's the foundation for everything else. As Ryan Pinkham broke down on Ecommerce Playbook, this isn't just about your home state anymore. The game completely changed after the Wayfair decision, which introduced "economic nexus." Now, simply selling a certain amount into a state can make you liable there.
In week one, I’d focus entirely on that study. I would list every state and look up their specific economic nexus thresholds, which are usually a combination of sales revenue and transaction count. I’d also identify any sources of "physical nexus." This is the part that trips people up. As Martina Chavez explained on The My Wife Quit Her Job Podcast, using a service like Amazon FBA means you have physical nexus wherever Amazon stores your inventory. That could be a dozen states you've never even thought about. The same goes for having a remote employee, an affiliate, or even attending a trade show.
Once I had my list of nexus states, my first month would be about getting compliant. I would absolutely not try to do this manually. It’s a path to madness. I’d sign up for a Sales Tax Automation service. There are many out there, and they handle the complexity of calculating the right rates at checkout across thousands of jurisdictions. They also handle registration and filing. I’d specifically look for one that works with the Streamlined Sales Tax (SST) program. Scott Peterson, the director of SST, explained on an episode of Ecommerce Conversations that this program lets you register in 24 member states through a single application, which is a massive time-saver.
Something I would pointedly ignore at the start is the specific taxability of every single product in every single jurisdiction. Let the software handle that. Your job is to understand your nexus footprint and get the system in place. Don't get bogged down in whether a specific type of clothing is exempt in Pennsylvania but not in New York.
The biggest trap to avoid is thinking this is a one-time project. It's not. Ryan Pinkham makes the point that sales tax is a living part of your operations. A strong Q4 could push you over the nexus threshold in five new states. You have to monitor your sales data constantly. And if you sell on a platform like Amazon, be aware of how Marketplace Facilitator Laws play a role, as they often require the marketplace to handle tax on your behalf. But this doesn't absolve you from compliance on your own DTC site. As Michael Jackness discussed on The eCommerceFuel Podcast, assuming the marketplace handles everything is a huge and costly mistake. It's complicated, but ignoring it is far more expensive than dealing with it.