The State Is Already Counting Your Sales Tax. Are You?

You’d think “is this taxable?” would have a simple yes-or-no answer—but a plain bagel can be tax-free until you slice it, clothing is exempt in some states and taxable in others, and digital products follow no consistent logic at all. Layer in nexus, where a single threshold of sales, a remote employee can suddenly obligate you to collect tax in a state you’ve never visited, and the complexity multiplies fast.

As a CPA and CFO, I’ll be blunt: most owners don’t discover the mismatch until an auditor does it for them. Ignoring sales tax is uniquely dangerous because the money was never yours—you collected it in trust for the state, and they will come looking for it with penalties and interest attached. The product doesn’t change, but the tax treatment does, and “probably fine” is how small assumptions become five-figure liabilities.

Do you actually know which of your products are taxable—and where you have nexus?