Getting Started: Sales Tax Compliance Checklist | Stripe

Getting Started: Sales Tax Compliance Checklist

Stripe Tax automates global tax compliance from start to finish, so you can focus on scaling your business. Identify your tax obligations, manage registrations, calculate and collect the right amount of tax worldwide, and enable filings—all in one place.

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Checklist

States constantly change tax rates, product taxability rules differ by jurisdiction, and selling across channels can create new tax obligations. Businesses that treat sales tax as an afterthought risk financial losses, fines or penalties, and damage to customer trust.

This guide walks through some of the first steps to sales tax compliance in the US—including assessing historic and current tax exposure and registering where required, remediating past gaps, automating rate and certificate management, and building a governance model that keeps your systems and teams audit‑ready.

1. Assess where you have tax obligations and set up ongoing monitoring

Export the last 12–24 months of gross sales and transaction counts by state, including county/city or special taxing district. Include marketplace and platform sales, warehouse activity, and any in‑person sales.
Once you have your sales data, review where revenue or transaction thresholds were met during the lookback period.
Track state, city, and special jurisdiction sales activity; nexus trigger date (when the obligation was met); filing frequency assigned by the state tax authority; and permit number (when obtained). Store this in a shared spreadsheet or internal system.

2. Register where required

Gather the right documents, including business formation documents, owner Social Security number (SSN) or Taxpayer Identification Number (TIN) where required, sales data for the taxing jurisdiction (warehouse contracts, employee locations), and bank information for electronic funds transfer (EFT) payments.
Register for sales tax permits, and log permit numbers and filing frequencies in your records.

3. Reconcile and remediate historical liabilities

Compare historical sales by jurisdiction to tax collected; identify uncollected liability and gaps in filings.
For significant past exposure, evaluate voluntary disclosure agreements (VDAs) or registration‑first approaches with counsel to reduce penalties and structure payments.
VDA: A VDA often reduces penalties and limits lookback; estimate potential liability, penalties, and interest.
- Registration‑first approach: Register and file returns prospectively; consult counsel on voluntary disclosures or negotiating past liabilities.
Keep all supporting documentation, remittance receipts, and calculations accessible in the event of an audit.

4. Clean up customer and transaction data

Use an address validation API that’s integrated into checkout and order import flows to ensure correct tax jurisdiction assignment.
Merge duplicates, ensure a single source of truth for customer shipping and billing addresses, and tag accounts with tax‑relevant attributes such as an in‑state warehouse customer.
Where possible, flag historical transactions as “tax collected,” “tax not collected,” or “exempt with certificate” to support remediation and reporting.

5. Classify products and shipping taxability

Understand where each SKU you have is considered a taxable product.
Document whether shipping is taxable by state and how you present shipping on invoices (separately stated versus included); update checkout logic accordingly.
Review taxability for digital goods, software-as-a-service (SaaS), and professional services in each jurisdiction, and assign appropriate tax codes. These types of products have varying taxability rules across states.
List exemption types (resale, government, nonprofit) and required certificate forms and validations per state.

6. Enable collections, exemptions, and certificate management

Use a certificate management tool to store exemption certificates, capture metadata (jurisdiction, exemption type, expiration), and automate renewal reminders.
Configure platform logic to apply exemptions only to qualifying transactions, and preserve certificate references on invoices and returns.
Ensure past transactions that used certificates are tagged for audit evidence.

7. Set up filing and remittance processes

Populate your tax calendar with filing frequencies, due dates, and any special payment rules per jurisdiction.
Understand each state’s filing process and forms required, and save your state login information in a safe place.
Ensure EFT, Automated Clearing House (ACH), or state payment methods are set up and funding is available. Implement approval workflows for remittances.

8. Reporting, reconciliation, and documentation

Reconcile tax collected by jurisdiction versus amounts reported on returns.
Store nexus analyses, registrations, exemption certificates, return PDFs, payment confirmations, and correspondence in a searchable location.
Build monthly and quarterly tax summaries for finance and leadership; include nexus status changes, open registrations, and outstanding remittances.
Follow state recordkeeping rules (commonly three to seven years—varies by state).

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful API.

Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. It can also register to collect tax on your behalf in the US and manage filings through trusted partners. Stripe Tax automatically calculates and collects sales tax, value-added tax (VAT), and goods and services tax (GST) on:

Digital goods and services in all US states and more than 100 countries
Physical goods in all US states and 42 countries

Stripe Tax can help you:

Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration, or add tax collection with the click of a button in the Stripe Dashboard.
Register to pay tax: If you need to register for a sales tax in the US, let Stripe manage your tax registrations, and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations. If you need help registering outside of the US, Stripe partners with Taxually to help you register with local tax authorities.
Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.
Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.

Automate sales tax, VAT, and GST collection and reporting on all your transactions—low- and no-code integrations are available.