Best practices for multi-state sales tax filing during busy months
by July 23, 2025
For businesses operating across multiple states, navigating increased sales volumes during peak shopping seasons, such as holidays and major sales events, can complicate sales tax compliance.
To help you manage multi-state sales tax filing more effectively during these busy periods, we’ve outlined best practices.
1. Understand nexus requirements
Before the busy months begin, ensure you have a clear understanding of where your business has sales tax nexus.
Nexus is the connection that triggers your obligation to collect and remit sales tax in a state. This connection can be established through physical presence (like an office or warehouse) or economic presence (total revenue or transactions within the state).
With economic nexus laws in over 46 states, it’s essential to monitor your thresholds since they are different in each state. For example, California requires businesses to register when sales exceed $500,000, but Tennessee’s revenue threshold is only $100,000.
As sales increase, you might inadvertently cross thresholds that establish nexus in new states, so regularly review your nexus status, especially during busy shopping seasons.
2. Stay updated on state regulations
Sales tax laws and regulations can vary significantly from state to state and change frequently. Stay informed about any recent legislative updates or changes in tax rates that may affect your sales tax obligations. Subscribing to updates from state tax authorities, following industry news, or using a sales tax automation tool can help you keep track of these changes. TaxJar summarized some 2025 mid-year sales tax updates to help keep sellers informed of changes.
3. Employ an automated solution
Managing sales tax compliance manually can be overwhelming, especially during busy months.
Sales tax automation tools like TaxJar, can calculate the sales tax for every transaction based on the correct rates and ensure you’re collecting the right amount in each state. It can also help you file returns automatically, saving you valuable time. Multi-state filers can waste up to 69 hours a month filing and remitting sales tax.
Based on TaxJar research, 64% of financial professionals who use automation report greater levels of confidence than those who do not.
4. Organize your data
Ensure that your sales data is well-organized and easily accessible. Accurate reporting is vital throughout the year, but especially during high-volume periods. Having your records in order will make it easier to file on time and help you avoid fees from filing late. This includes maintaining detailed records of sales by state and product category, as well as keeping exemption certificates convenient for any tax-exempt sales.
5. Prepare for filing deadlines
Know your filing deadlines for each state where you have sales tax obligations. States have different filing frequencies (monthly, quarterly, bimonthly, or annually), and missing a deadline can result in penalties. For example, check out this typical filing scenario for businesses selling across multiple states:
Create a detailed calendar that includes these deadlines, and set reminders well in advance so you can ensure timely filing. An automated tool, like AutoFile that files on your behalf can make this easier as well.
6. Document everything
During busy months, with more on your plate, the risk of errors can increase. Keep meticulous records of your sales tax calculations, returns, and any correspondence with tax authorities. This documentation can be invaluable in case of audits or disputes, and it will help ensure you have everything you need at your fingertips.
How an automated solution can help growing businesses
Managing sales tax compliance across multiple states manually can be overwhelming, especially during busy months.
Automation software can calculate the sales tax for every transaction based on the correct rates and ensure you’re collecting the right amount in each state. It can also help you file returns automatically, saving you valuable time. In fact, multi-state filers can waste up to 69 hours a month filing and remitting sales tax.
TaxJar is a great tool for multi-state businesses looking to streamline their compliance processes, giving them back hours each month while ensuring accuracy. Our tool automates the entire process, from nexus monitoring to reporting to automated filing and remittance. TaxJar stays on top of sales tax changes, so you are always compliant, even when laws are updated.
Our 30-day free trial gives you the opportunity to see how TaxJar can support your compliance goals and allow your company to continue to grow without sales tax management slowing you down.
If you’d like to learn more about how TaxJar can help support your compliance goals, feel free to respond to schedule a time to chat with our sales team here.
