The moment you cross $100K in sales across state lines or start using FBA warehouses in multiple states, you are not just growing revenue. You are triggering tax obligations in places you have never even visited. And the silence from state tax authorities is not approval. That is them waiting.
I have talked with hundreds of Shopify founders over the years, and the pattern around sales tax compliance is almost always the same. In the early days, the business is moving fast, revenue is climbing, and every dollar of attention goes toward acquisition, conversion, and retention. Sales tax feels like a problem for later, for when the business is “big enough” to worry about it. Then later arrives, usually in the form of a state inquiry, a due diligence process before an acquisition, or a conversation with a new accountant who asks a question no one has a clean answer to.
The uncomfortable truth is that “big enough” arrived much earlier than most founders realize. The 2018 Supreme Court ruling in South Dakota v. Wayfair changed the rules for every online seller, and the full scope of what that means for ecommerce brands selling across state lines is still catching people off guard in 2026. States have become more sophisticated in how they identify non-compliant sellers, more aggressive in enforcement, and more creative in expanding what triggers a tax obligation in the first place.
This is why I brought Reuben Mattinson of RJM Tax Exemption onto the podcast. Not because sales tax is a glamorous topic, but because the brands that get this right early protect their margins, their exit multiples, and their peace of mind. The ones that wait are playing a game where the downside is a five-figure catch-up bill at exactly the wrong moment.
RJM Tax Exemption is a specialist tax compliance firm focused exclusively on ecommerce sellers. Reuben founded it after living the problem himself as a UK-based entrepreneur trying to crack the US market and running into a wall of confusing, inconsistent guidance from law firms and accounting practices that charged premium rates for advice that was clearly built for a different kind of business. The frustration was not just the cost. It was that the advisors he hired did not understand marketplace facilitator laws, did not know how FBA warehouse locations create physical nexus, and could not explain the difference between what Amazon handles and what the seller is still responsible for.
That gap is exactly what RJM was built to close. The team focuses on sales tax registration, filing, exemption consulting, business formation for US market entry, and income tax filing for ecommerce operators. They have worked with more than 5,000 businesses across the US and internationally, and they carry a 4.9-star rating on Trustpilot, which in a category where most people only leave reviews when something goes wrong, is a meaningful signal. I featured Reuben on Episode 441 of the eCommerce Fastlane podcast because the conversation he and I had was one of the most practically useful tax discussions I have had in nine seasons of this show.
Economic nexus is the one that gets all the attention. Hit $100,000 in sales or 200 transactions in a state, and you have crossed a threshold that requires you to collect and remit sales tax there. Most founders who have done any research at all know this piece. What they are almost universally missing are the other three.
Physical nexus is triggered the moment your inventory sits in a state, not just when you have an office or employees there. If you use Amazon FBA and Amazon has placed your products in warehouses across 36 states, you have physical nexus in up to 36 states. That is true whether or not you have ever made a single sale to a customer in those states. The warehouse location alone is the trigger.
Affiliate nexus applies when you have people in other states driving traffic to your Shopify store and earning commission. Influencer partnerships, referral programs, and affiliate arrangements all carry this risk. The thresholds vary by state and can be surprisingly low, which means a brand with an active influencer program in multiple states is almost certainly carrying affiliate nexus exposure they have not mapped.
Click-through nexus is the fourth type and the one that surprises people most. If another website, a blog, a media property, or a content creator sends traffic to your store through a referral link and that entity is based in a particular state, you may have nexus in that state based on the volume of traffic they drive. As Reuben explained in our conversation, states have become quite precise about how they define and enforce these thresholds. Waiting until you feel big enough to care about them is the wrong strategy.
The core of RJM’s work is removing the administrative burden of US sales tax compliance from the brand’s plate and handling it through a team of specialists who live in this space every day. Here is what that looks like in practice across their main service lines.
Sales tax registration is where most brands need to start. If you have identified states where you have nexus and have not yet registered, RJM handles the registration process across those states, manages the communication with state tax authorities on your behalf, and gets you into a position where you can legally collect and remit. Their pricing on registration is $200 per state, compared to $297 at TaxJar and $347 at Avalara. The price match guarantee they offer means that if you find a lower price from a recognized competitor, they will match it.
Sales tax filing is the ongoing service that keeps you compliant after registration. RJM’s Basic Bundle starts at $40 per month and includes 12 free returns per year, unlimited transactions for one marketplace store, economic nexus tracking, and an assigned consultant who handles state communications. The Basic Plus Bundle at $80 per month expands coverage to up to three stores including Shopify. Additional returns beyond the included 12 are $40 each. For context, the same scope of service through TaxJar or Avalara at comparable transaction volumes runs meaningfully higher once software fees, service charges, and activation costs are factored in.
Sales tax exemption consulting is a service that often surprises founders. Depending on your business structure and how you purchase inventory, you may qualify for reseller exemptions that eliminate sales tax on your own purchasing. RJM’s Alibaba sales tax exemption package, priced at $1,397, is designed specifically for brands sourcing from Alibaba who qualify for this treatment. It is not universally applicable, but for the brands it fits, it produces direct cost savings on every purchase cycle.
Business formation is relevant for international sellers entering the US market. RJM handles LLC and EIN setup for both US citizens (at $297) and foreign-owned entities, including operating agreements and the first year of registered agent service. The state formation fee is separate. For international brands that have been operating in the US without a proper structure, this is often the first step before any tax registration work can begin.
Income tax filing rounds out the service offering. RJM uses US-based accountants for annual income tax filings, which is particularly important for international sellers who often assume that because they are not based in the US, they have no US income tax obligations. That assumption is frequently wrong, and the IRS penalty for non-filing when filing was required can run into the tens of thousands of dollars regardless of whether any tax was actually owed.
One of the most useful things Reuben shared in our conversation was a concrete cost comparison for a realistic mid-market scenario: approximately 20 sales and use tax registrations, 150 returns per year, and 10,000 transactions per month. At that scale, the total annual cost through RJM comes to approximately $10,400. The equivalent scope through TaxJar runs approximately $13,128. Through TaxJar Professional it climbs to $20,928. Through Avalara it lands at $16,340 or more depending on the plan configuration.
The gap is not trivial. At the $500K to $2M revenue stage where many Shopify brands are operating, the difference between $10,400 and $16,340 per year for equivalent compliance coverage is real money that can go toward acquisition or retention instead. The Trustpilot comparison is also worth noting: RJM carries a 4.9 rating, TaxJar a 2.2, and Avalara a 3.5. For a compliance function where the cost of errors is measured in penalties and back taxes, service quality is not a secondary consideration.
RJM is built for small to mid-market ecommerce brands. Their own pricing page describes the sweet spot as businesses selling primarily through marketplace channels like Amazon, Shopify, Etsy, or Walmart, with transaction volumes that do not require the kind of enterprise-grade software integrations that Avalara’s 1,000-plus integration catalog exists to support. If you are running a $50M-plus operation with a complex ERP stack, dedicated finance team, and need for deep API integrations across dozens of platforms, Avalara’s enterprise offering is probably the more appropriate infrastructure even at the higher cost.
RJM also does not include income tax filing in its price match guarantee. That service is handled separately and is not subject to the same competitive pricing commitment as the sales tax and registration work. For brands that need both sales tax compliance and full-service income tax filing, it is worth clarifying scope and pricing for the income tax component specifically before committing.
The software integration footprint is narrower than Avalara’s. RJM’s platform connects with 5 to 10 integrations compared to Avalara’s 1,000-plus. For most Shopify brands selling through a small number of channels, this is not a practical limitation. For brands with highly complex multi-channel setups that require automated data flows across many systems, it is a factor worth discussing with the RJM team before signing up.
For brands that want a software-first, self-serve approach with minimal human involvement, TaxJar’s lower entry price point at $19 per month may be worth evaluating, with the understanding that the Trustpilot rating gap reflects a meaningful difference in service experience and that the per-order pricing model can scale costs quickly as volume grows. RJM’s model is human-led and consultant-assigned, which suits founders who want a relationship with a real person who knows their account rather than a dashboard they have to manage themselves.
Disclosure: eCommerce Fastlane has an affiliate relationship with RJM Tax Exemption. That relationship does not change the assessment above. The pricing data, Trustpilot ratings, and service comparisons in this post are sourced directly from RJM’s published pricing pages and verified against publicly available competitor information.
If you have read this far and you are not certain whether you have nexus obligations in states beyond your home state, that uncertainty is itself the signal. The right move is not to keep researching. It is to get a clear picture of your actual exposure from someone who does this every day.
RJM offers a free, no-obligation 30-minute compliance assessment. You book a call, walk through your current setup, and come away with a realistic view of where you have nexus, what your exposure looks like, and what it would cost to get fully compliant. There is no pressure to engage beyond that call. For most founders, the call itself produces enough clarity to make a decision.
If you are not ready for a call, start with the comprehensive ecommerce sales tax guide on this site, which covers the state-by-state economic nexus thresholds and gives you a baseline for understanding where you may already have obligations. Then come back to this when you are ready to talk to a specialist.
The brands I have watched navigate this well are the ones who treated compliance as a cost of doing business from the beginning, built it into their unit economics, and never had to scramble to fix five years of exposure under time pressure. That path is still available to you. The longer you wait, the narrower it gets. You can book your free RJM compliance assessment here and get a clear picture of where you stand.
Sales tax nexus is the legal connection between your business and a state that requires you to collect and remit sales tax there. You can establish nexus in four ways: economic nexus (hitting a revenue or transaction threshold, typically $100,000 in sales or 200 transactions in a calendar year), physical nexus (storing inventory in a state, including through Amazon FBA warehouses), affiliate nexus (having influencers or referral partners in a state driving commission-based traffic), and click-through nexus (having other websites send customers to your store via referral links). Most Shopify brands have nexus in more states than they realize, particularly if they use FBA or work with affiliate partners.
Amazon acts as a marketplace facilitator, which means Amazon collects and remits sales tax on your behalf for sales made through their platform. Shopify does not. When you sell through your Shopify store, you are the merchant of record and you are responsible for knowing where you have nexus, registering in those states, charging the correct tax rate at checkout, and filing returns on time. The critical issue for Amazon FBA sellers launching on Shopify is that the FBA warehouses that created your physical nexus across up to 36 states do not disappear just because Amazon was handling the tax. Those nexus obligations follow you to Shopify from day one.
The cost depends heavily on how many states are involved, how many years of exposure exist, and whether you pursue voluntary disclosure before a state identifies you. Voluntary disclosure programs allow you to come forward proactively, which typically caps the lookback period (often to three years or less) and reduces or eliminates penalties. Acting before a state audit or inquiry is almost always significantly less expensive than resolving the same issue after a state has already flagged you. RJM’s free compliance assessment will give you a realistic estimate of your specific exposure and what a resolution path looks like for your situation.
Yes. RJM has extensive experience with international brands entering the US market, including handling EIN applications for entities without a US presence, LLC formation for foreign-owned businesses, sales tax registration across the relevant states, and income tax filing for non-US entities that have US-sourced revenue. International sellers often mistakenly assume that operating from outside the US eliminates their US tax obligations. In many cases it does not, and the IRS penalty for non-filing when filing was required can be substantial even when no tax is actually owed. RJM’s free consultation is available to international sellers and covers the full scope of what US market entry requires from a compliance standpoint.
Avalara and TaxJar are primarily software platforms that automate sales tax calculation at checkout and connect to your ecommerce systems via integrations. They require you or your team to manage the platform, interpret the outputs, and handle registration and filing either through the software or separately. RJM is a human-led specialist firm where a dedicated consultant manages your compliance work directly. RJM does use supporting software, but the primary relationship is with a person who knows your account. For brands that want a managed service with a real point of contact rather than a self-serve dashboard, RJM’s model is a meaningfully different experience. Avalara’s 1,000-plus integration catalog makes it the stronger fit for large enterprise operations with complex multi-system requirements.
