I run a small online store selling custom print on demand t-shirts. Started it as a side hustle last year, hit 50k in sales pretty quick through Etsy and my Shopify site. Felt like I was killing it, first real business ever.
Never thought about sales tax. Figured since Im in California and dropshipping from a printer in Texas. Read some google articles saying out of state sales were fine if under certain limits. Kept seeing stripe deposits roll in, paid myself quarterly, filed personal income taxes like normal. No issues.
This week got an email from my accountant prepping 2025 returns. He pulls my stripe reports and his face goes white. Turns out I hit economic nexus in 12 states last year alone. Smashed it in places like Texas, New York, Florida without collecting a dime Now he says I owe back taxes, penalties, interest. Ballpark 28k. Shopifys tax settings were off because I never enabled them, stripe just reported gross sales. Printer never mentioned anything. Ive been operating blind.
Panicking hard. Business account has 12k left after recent inventory spend. Anyone been through this nightmare?
I owe $28K in sales tax across 12 states after filing zero sales tax for two years
byu/EyeImpossible4412 intax
Posted by EyeImpossible4412
6 Comments
Time to negotiate with the state revenue departments for a payment plan.
Then increase your prices a bit and start collecting state sales tax.
most states will work with you on payment plans for any past due. ask your accountant to help you set those up. Pay him for that service.
I constantly check my Shopify tax area. I’m registered in Nebraska. So far I stay below the nexus’ tho of other states. I’m kinda surprised with that kind of sales you didn’t just have Shopify do the taxes for you. With that kind of sales, the cost seems very small to avoiding things like this.
How did you ignore the red alert *you are not registered to collect sales tax* across your Shopify for that long? I went a year ignoring it, then decided I better get my tax ID from Nebraska
should be able to do payment plans
How could you have economic nexus in 12 states with only 50k of sales?!?!? What are your year to date sales?
Have the states requested this money? Or just the bookkeeper?