Steve Hutt:
Well everyone, welcome back to eCommerce Fastlane. I’m your host, Steve Hutt. Today we’re going to dive into a topic that isn’t glamorous, but is absolutely critical if you’re serious about scaling your business on Shopify: sales tax compliance. It’s not the kind of thing that lights up LinkedIn or gets much stage time at conferences, but the moment you start shipping across state lines, hit economic nexus thresholds, or expand internationally, you step into a world of compliance requirements that can quickly turn into a bureaucratic nightmare. Some people put their heads in the sand and pretend it doesn’t exist and just keep running the business as-is, but that’s not the right way to deal with taxation. That’s one of the reasons why I’ve brought on today’s guest, Reuben Mattinson.

Steve Hutt:
He’s the CEO of a company called RJM Tax Exemption. His team has helped four to five thousand ecommerce businesses navigate the complexity of US tax compliance, and they work exclusively with online sellers. When you look at their history and reviews online, they’re clearly one of the top tax compliance pros in the Shopify ecosystem. It makes sense to have them on because they speak from a place of authority and trust, which is exactly what we want when it comes to financial topics. So, hi Reuben, welcome to eCommerce Fastlane.

Reuben Mattinson:
Steve, absolute pleasure to be here.

Steve Hutt:
Yeah, so, taxation is definitely not a sexy topic, but it’s important. I dug into your background before recording and it’s quite interesting. You started in physiotherapy, then became a high school science teacher, and now you run a top-rated tax firm on Trustpilot for ecommerce. Can you talk a bit about that journey? It sounds like a lot of random steps, but here you are—having run your own ecommerce brand at one point and now leading this company.

Reuben Mattinson:
Yeah, I think the common thread across those different roles is working with people, helping people, and trying to do that better. Those are the transferable skills. But you’re right, it’s not the obvious progression from physiotherapist to tax consultancy firm. I stumbled into it while I was still teaching and set up my own ecommerce business, as you mentioned. As you can probably tell, I’m not from these parts—I’m from the UK—so I hit a lot of hurdles and walls trying to start selling into the US.

Reuben Mattinson:
There are plenty of walls even if you’re US-based, and most of our clients now are US-based. But early on, I saw how difficult it was as an international business. We initially worked with a lot of international sellers. My frustration came from speaking to law firms and accountancy firms, paying a lot of money, and getting very little back—especially very little understanding of the complex reality of being an online seller, selling into every state with different rules and regulations. That frustration led to the idea that there was a real niche to serve people better and probably charge a lot less. I was paying a lot to CPAs who weren’t well-versed in ecommerce, particularly sales tax.

Steve Hutt:
Yeah, that’s interesting. Let’s talk a bit about the foundation—specifically nexus. It’s a topic on a lot of people’s minds. Many founders have heard the word thrown around, but don’t really understand what it means for them or when they need to start caring about it. Can you break down what nexus actually is, and more importantly, at what point in a Shopify store’s growth should someone get serious about it?

Reuben Mattinson:
Nexus comes in many different forms. I was just speaking to my COO the other day, asking whether the plural is “nexi” or “nexuses.” Either way, there are several types you need to be aware of. As for when to start paying attention, the answer is from day one. A lot of people think the only nexus that matters is economic nexus, so they just watch sales volume or the number of units they ship into a state and wait for a threshold to trigger. To answer your first question, nexus is basically a threshold being crossed where you create a sufficient connection with a state that they can require you to collect and remit sales tax.

Reuben Mattinson:
You can cross that threshold in multiple ways. A more complicated form than economic nexus is physical nexus. That’s triggered by things like where your products are stored—your warehouses and fulfillment centers—and even where your staff are based. That can get complicated when you’re selling across the entire United States. There’s also an odd one: if you do trade shows in certain states, you can trigger physical nexus there as well and need to be careful about that.

Reuben Mattinson:
Then there are two others that are even more commonly missed. Affiliate nexus applies when you have people in the US referring customers to your website and you’re paying them commission, which is common with influencers and partners driving traffic to your Shopify store. You have to be aware of where those affiliates are based and the volume they drive, because you can cross affiliate nexus thresholds in a lot of states, and those thresholds can be quite low.

Steve Hutt:
Yeah, that’s interesting. So we have physical—I wrote that down—because I didn’t know all of these. I always thought about economic nexus as just a monetary amount. I really appreciate the distinction with physical nexus and then affiliate as well. That’s quite interesting.

Reuben Mattinson:
Exactly. And even with economic nexus, many people think it’s just a dollar value per calendar year. But in a lot of states, it’s tied to the number of units sold. If you sell low-cost products, you can easily cross, say, 200 transactions in a calendar year, which is the threshold in some states. You have to watch that. The last one to mention is click-through nexus, where another website drives traffic to your site and the entity owning that site is based in a particular state. You also need to track the volume they drive, because states have thresholds there too.

Steve Hutt:
Another thing I’ve learned over the years is that a lot of sellers get tripped up because they start in the Amazon FBA world, where Amazon collects and remits all the sales tax. They assume that when they launch a Shopify store, it works the same way, but it clearly doesn’t. Can you explain why Amazon and Shopify are different here, and what that means for a seller who has been living in the Amazon bubble and now adds Shopify?

Reuben Mattinson:
If you’ve been living in the Amazon bubble, you’ve been standing behind Jeff Bezos while he takes responsibility for collecting and remitting your sales tax. Amazon lost a legal case a while back and was deemed to be a seller of the product just as much as you, which is why the responsibility landed on them. Because they sell in massive volumes, of course they have to collect sales tax on every purchase, and it’s great they do that for you.

Reuben Mattinson:
The big blind spot is when people then go to sell on Shopify. Shopify is not a marketplace facilitator like Amazon. They’re not selling your product; you are. You have to drive the traffic and build the business. Because of that, Shopify has no responsibility for your sales tax—it’s all on you. Here’s something important for listeners: if you’re selling on Amazon FBA and you also want to sell on your Shopify site, remember that you’ve already stored products across the US in Amazon FBA warehouses. Amazon has warehouses in roughly 36 states, and if you store product in a warehouse in any of those states, that state gives you physical nexus.

Reuben Mattinson:
Up until now, Amazon has been collecting and remitting sales tax for those states, so you might not have needed to register everywhere. But as soon as you start selling on Shopify, you’re not starting from zero. You’re starting from having nexus in up to 36 states and needing to be registered in those states from day one. Many people think their Shopify business is separate or that they haven’t made any sales yet, so it doesn’t matter—but that’s not how it works. A lot of people put their fingers in their ears at that point and hope it goes away, but you have to be careful. If states come after you in the future, they can legitimately say you should have been collecting sales tax because you stored products on their soil, and they can claw that money back out of your profits.

Steve Hutt:
Yeah, one thing I learned during my time at Shopify is that, from a tax perspective, Shopify has a pretty solid tax engine, especially for domestic US orders. It can take into account the origin of the goods and the destination shipping address, plus state and sometimes county-level rules and rates. Over the years, a lot of merchants connected tools like Avalara or TaxJar because they wanted extra accuracy. I believe Avalara is the only one directly integrated via API with Shopify right now, which gives very precise in-cart calculations at checkout. That matters because, for example, in Washington State, not every city and county has the same rate, and generic tax engines sometimes just assume a flat rate, which is wrong.

Reuben Mattinson:
Yeah, and Shopify’s tax engine is brilliant now. As you’ve probably noticed, they take a fee for the privilege of handling tax calculations and collection, but they do a great job with the thousands of jurisdictions out there. It has made life much easier and often cheaper than when you had to bolt on software like Avalara or TaxJar to get that level of accuracy.

Steve Hutt:
So, have you seen any mistakes over the years? I’m sure you’ve worked with Shopify brands that start growing and suddenly have all these different types of nexus—not just economic, but physical and affiliate and so on. Without throwing anyone under the bus, have you seen brands in that $1–5 million range get shocked by what can happen when they haven’t been thinking about nexus?

Reuben Mattinson:
All the time. The Amazon FBA warehouse issue we just talked about is a big one. Even if you’re not storing products in every warehouse, there are states that legally want you to be registered and file even if all your sales are through Amazon. They want gross filings and deductions that reconcile what Amazon is reporting, before you ever touch Shopify. Then when people move to Shopify, the mistakes multiply.

Reuben Mattinson:
A major one is assuming states can’t track them. In the US, people are terrified of federal tax, but treat sales tax like a harmless little teddy bear. In Europe, VAT—our equivalent of sales tax—is treated just like national tax and taken very seriously. You can get into serious trouble there, and you can absolutely get into serious trouble with sales tax in the US too. Many sellers think, “How will states find me if I never register? They don’t have the resources.” That’s a big mistake. States communicate with marketplace facilitators to check your sales volume, with fulfillment centers to see where inventory is, with payment processors like Stripe and other gateways plugged into Shopify, and even with carriers and logistics providers. When they see significant volume coming into their state, they can trace it back to you. Worst-case scenarios involve large fines, penalties, and even holds on bank accounts and assets.

Steve Hutt:
Wow, that’s wild. What about non-US sellers? A big portion of the audience is international, trying to break into the US market. That’s a different animal, with US-specific structures they’ve never had to consider before. Are there misconceptions you see from international sellers who want to start selling into the US?

Reuben Mattinson:
First, shout out to all the international sellers—we get you. We’re international as well, even though we’re US tax experts, and we love working with brands from all over the globe. As I mentioned, a lot of US-based sellers don’t treat sales tax seriously. International sellers often feel even more insulated because they’re outside the country, which adds another layer of “ignorance is bliss.” We see that a lot.

Reuben Mattinson:
From an income tax filing standpoint, we cover everything: sales tax, state tax, franchise tax, and income tax. Many internationals think, “I’m not based in the US, so I don’t need to pay US income tax.” Even if they correctly determine they don’t owe income tax because they don’t have permanent establishment, they often assume they don’t need to file anything. In reality, they often do need to file—even if no tax is due. If you don’t file when you should, the IRS can hit you with a blunt penalty—often in the tens of thousands of dollars—for non-filing, especially if you’ve been operating for a while. That’s a big one we see missed.

Steve Hutt:
Yeah, you hear terms like “mind and management” thrown around—people saying, “My corporate address is here, I’ll pay tax only where my company is domiciled.” But that concept doesn’t really protect you the way people think anymore.

Reuben Mattinson:
Exactly. It’s a strange area. When we meet a business owner who clearly takes their business seriously, the mindset is very different. But there’s a frightening number of people who think, “It’ll never come back to me, there won’t be issues.” The problem is, if you’re building an amazing Shopify business, it often becomes your most precious asset, especially if your long-term goal is a strong exit. When you go to sell, any serious buyer will audit you top to bottom. If they uncover compliance issues, you may not be able to sell at all, or you’ll have to spend a lot of money fixing things under time pressure. We’ve had to help brands in exactly that situation. If you do the work at the beginning—which isn’t that hard—you save yourself a lot of pain later.

Steve Hutt:
It’s funny—some brands in their early days are almost entirely focused on vanity metrics: top-line revenue, site traffic, maybe high-level conversion rate and AOV. Those are helpful, but you can have all the sales in the world and still be at zero or negative if acquisition costs are too high and you don’t have a retention strategy to drive second and third purchases and build loyal customers. A lot of this comes back to business acumen and financial hygiene: having a solid P&L, a cash flow statement, and doing things properly. You mentioned exits—many brands see that as a viable outcome and want a strong multiple, but when a buyer starts peeling the onion, the finances need to be in order.

Reuben Mattinson:
Yeah, and I don’t completely blame people because tax isn’t exciting. When you start a business, it’s doing really well, profits are coming in, it’s easy to get caught up in the excitement. Ecommerce is especially exciting because, unlike many other businesses, you can see almost overnight success: hitting the right product at the right time or landing on the right influencer’s TikTok can send thousands of people to your site. Before you know it, you’ve crossed multiple nexus thresholds you never expected to hit, and you weren’t paying attention because you were focused on the growth moment.

Reuben Mattinson:
That kind of sudden spike is great, but it also brings compliance into play very quickly. The key is to be aware of that and not get so swept up in the excitement that you ignore your obligations—although, of course, you should still enjoy the wins.

Steve Hutt:
Let’s talk a bit about RJM as a business. From what I understand, you don’t necessarily hire CPAs for standard compliance work. You try to keep costs down for clients. Can you explain your approach? People can get nervous when they start adding professionals into the mix—sometimes the hourly or project rates are justified, but often they’re hard to swallow. You take a different angle.

Reuben Mattinson:
That’s a big part of why we’ve been successful. As I mentioned earlier, I was frustrated with paying a lot to speak with CPAs and not getting much value, especially in sales tax. CPAs are excellent at providing legal-level advice and doing full audits for very large businesses, but in the sales tax niche, they’re often overpaid and, ironically, underqualified because it’s below the level of work they usually focus on.

Reuben Mattinson:
We realized you don’t have to pay CPA rates for most of this. You can hire highly skilled tax professionals who specialize in sales tax. That’s how we’re structured. We have excellent sales tax specialists handling the complex multi-state compliance, which allows us to offer things like a price-match guarantee against any established ecommerce tax firm. For income tax, we use US-based accountants, but again, you don’t always need CPAs doing routine work. If you need specific legal advice or you’re worried about a complex situation, by all means bring in a CPA or tax attorney. But for most ecommerce compliance, dedicated specialists are more cost-effective and very high quality. That model lets us pay our staff well, create a positive environment, and consistently deliver strong results—which is a big reason our customer ratings are so high.

Steve Hutt:
So what happens when a business is listening now and thinks, “Okay, I understand my liabilities a bit better, and I’m on the journey, but I probably need someone to look at my current setup”? How do you help a brand figure out where they stand and what their next steps should be?

Reuben Mattinson:
First step: if you go to our website, you’ll see an option to book a free consultation. We offer completely no-obligation, no-pressure calls—just a chance to talk. The goal is to give you real value: answer your questions, address your concerns, and get a general sense of your tax position right on the call. Whether you’re an international business, a US-based business, or a US entity owned by a foreign parent, we’ll give you a high-level view of where you stand on sales tax, franchise tax, income tax, and more.

Reuben Mattinson:
After that, we send you a free sales tax nexus survey. You fill that out, and from there we can give you a much clearer picture of where you have nexus, what your exposure looks like, and what it will take to fix it. And if you’re nervous about talking to me, there’s another option: our blog. We’ve built out a lot of in-depth content on sales tax, business formation, filing FAQs, and general tax compliance. There’s a search bar—type in key terms and you’ll find practical, ecommerce-specific explanations in our favorite niche: the ecommerce space.

Steve Hutt:
Yeah, I see that. I’m looking at sections on business formation, FAQs, sales tax filing, and tax compliance. There’s a ton of content there for the DIY crowd who just wants to understand more. Looking ahead to 2026, are there any major tax or compliance changes you see on the horizon that sellers should be preparing for?

Reuben Mattinson:
Surprise, surprise—laws aren’t getting simpler, and states aren’t taxing less. We’re in communication with states all the time, and what we see is more thresholds, more definitions, and more reasons to tax you. Services are increasingly being pulled into the nexus net, not just physical products. Even if you sell services or digital offerings, more states are expecting you to track nexus and potentially collect and remit.

Reuben Mattinson:
If I were giving a tax weather forecast, the outlook isn’t exactly sunny. But the good news is you’ve got people like us in your corner, working to keep things as simple and cost-effective as possible while you stay compliant.

Steve Hutt:
Yeah, I noticed something when I ran a quick check on this topic earlier. One of the trends is the elimination of transaction thresholds. For example, Illinois is removing its 200-transaction threshold for economic nexus starting January 1st, leaving only the dollar threshold. I imagine other states will follow, since many currently use a “$100,000 or 200 transactions” rule. That’s one change that’s happening right now.

Reuben Mattinson:
Exactly. Another example that comes to mind is the California franchise tax. Historically, if you were an FBA seller storing products in a California warehouse, they often left you alone on franchise tax. Now, if you store even a single product in a California warehouse, you don’t just register for sales tax—you’re also subject to an $800 per year minimum franchise tax just for the privilege of storing inventory on their soil. They’ve become quite aggressive there.

Reuben Mattinson:
It is what it is. States, for the most part, do understand the realities of running an ecommerce business and aren’t all out to ruin you. But there are definitely a few that feel like that neighbor you try to avoid because they’re always causing trouble. The key is that we can help you navigate that and stay ahead of it.

Steve Hutt:
All right, good stuff. I want to make sure everyone has the correct website. It’s rjmtaxexemption.com, and we’ll link it in the show notes for today’s episode. I see the “Book Now” option right there—a free 30-minute consultation to get an audit of where you stand from a compliance perspective across all these different types of nexus: physical, economic, affiliate, and click-through. These are all important criteria. It’s about understanding your P&L, your cash flow, and the financial health of your business, and then seeing whether your team might be a good fit to help.

Steve Hutt:
At the end of the day, this is about education. It depends where you are in your entrepreneurial journey and what size your business is, but it’s worth having pros who are deep in the trenches with Shopify brands take a look. That’s why I brought you on today—because as unsexy as this topic is, it’s incredibly important for the long-term health and value of the business. This has been a very eye-opening episode. Thanks for coming on and sharing.

Reuben Mattinson:
An absolute pleasure to be here, Steve. I really look forward to having some helpful conversations with your listeners.

Steve Hutt:
Absolutely. Have a great afternoon, and thanks again for recording.

Reuben Mattinson:
Thanks, Steve.

Steve Hutt:
All right, take care. That’s it for today’s episode. I’d like to thank you personally for being a loyal listener of eCommerce Fastlane. My hope is that this podcast gives you a ton of value through growth strategies, tactics, and insider tips on the best Shopify apps and marketing platforms—all with the goal of helping you build, manage, grow, and scale a successful, thriving company powered by Shopify. Thanks for investing some of your time today and listening to the show. I’m proud and excited that you have a growth mindset and are a constant learner. I truly appreciate you and your entrepreneurial journey. Enjoy the rest of the week, and keep thriving with Shopify.