Retail Tax Compliance in 2025: What’s Changed and How to Stay Compliant

As an eCommerce agency, we know taxes can be… well, taxing. They’re complex, overwhelming, and usually the last thing any merchant wants to think about. But in 2025, retail tax compliance isn’t something online sellers can afford to ignore. With regulations tightening and enforcement ramping up, understanding your tax obligations is the name of the game if you want to keep selling without interruptions. Don’t worry—we’ve got your back. We’ll walk you through exactly what tax compliance looks like in 2025 and what you need to do to stay on top of it, one step at a time.

Retail’s Resurgence Comes With a Compliance Cost: Why Booming Sales Mean More Tax Headaches Your sales are thriving—and that’s something to celebrate. But booming revenue also brings a less exciting side effect: more complex tax obligations. As sales tax trends for retailers shift, tax policies are evolving just as fast as the eCommerce space itself. What worked last year might not cut it in 2025. The more your business scales, the more jurisdictions, product types, and rules you’ll need to account for. Falling behind isn’t just inconvenient—it can put your entire operation at risk.

States are stepping up enforcement to capture every dollar in tax revenue, and that means retailers must now master more than just great customer experience. You’re not expected to become a tax expert, and honestly, you shouldn’t have to. That’s where a strategic agency partner comes in. Partnering with an agency that understands your industry and the ins and outs of retail tax compliance can be the difference between thriving and treading water.

Economic Nexus for eCommerce: Why Thresholds Are Vanishing and Risks Are Rising Let’s talk about a key term you need to know in 2025: economic nexus . It refers to how states determine if your business owes sales tax based on your sales activity in the state–not whether you have a physical storefront there. That means if you're making enough sales in a particular state, you're likely on the hook for collecting and remitting sales tax there, even if your business is based elsewhere.

In 2025, this concept has become even more challenging for online retailers. Many states have done away with the old 200-transaction threshold, focusing solely on total sales revenue instead. For example, as of January 1, 2025 , Alaska eliminated the 200-transaction rule, and 14 other states followed suit. New Jersey has introduced a bill to do the same.

This shift means even smaller sellers can unknowingly cross into tax liability territory. If you’re not monitoring where your customers are, how much you’re selling, and what’s changing in each state, you could face unexpected compliance issues.

Retail Delivery Fees: From Colorado to Maryland, the New “Non-Tax” Tax Retail delivery fees (RDFs) are quickly becoming one of the most talked-about compliance challenges for eCommerce businesses in 2025. At their core, RDFs are charges imposed by state or local governments on goods delivered to customers via last-mile delivery services—not your typical commercial carriers like FedEx or UPS. While they aren’t technically labeled as taxes, they function similarly. What started in Colorado has now spread to Minnesota, with more than 10 other states—including Maryland, New York, and Washington— actively considering similar legislation .

This signals a broader trend: lawmakers are finding creative ways to capture revenue from online retail. For eCommerce merchants, that means RDFs can’t be ignored. Staying on top of these rules is essential to avoid fines or delivery disruptions. As these policies evolve, having a clear understanding and adapting your operations will be key to compliance–and customer trust.

Sales Tax Holidays: Why They’re More Hassle Than Help for SMBs Sales tax holidays may sound like a win for shoppers and a sales boost for retailers—but for small and mid-sized eCommerce merchants, they’re often more hassle than help. These holidays temporarily suspend sales tax on certain items, but with each state setting its own timelines, qualifying products, and last-minute changes, compliance can be a nightmare. SMBs often scramble to adjust, risking errors and compliance gaps.

In fact, nearly 60% of SMBs report struggling to turn a profit during these periods due to the added burden of tracking, reporting, and adjusting for shifting tax rules. Unlike large retailers with in-house tax teams, most small eCommerce merchants lack the infrastructure to manage these changes smoothly. That’s where sales tax automation becomes a game-changer–reducing manual work, helping you stay compliant, and freeing up time to focus on growth.

Marketplace Facilitator Laws: Shifting the Tax Burden to Platforms and Sellers Marketplace facilitator laws have changed the game for eCommerce sellers, shifting the responsibility of collecting and remitting sales tax to platforms like Amazon, Etsy, and Walmart. On the surface, this might sound like a relief—less for you to worry about, right? Not exactly. While these platforms handle tax on your behalf for sales made through them, you’re still responsible for transactions made elsewhere, like your own website or direct B2B orders.

Plus, marketplace sales can still impact your economic nexus in some states. Even if you don’t sell directly into a state, your marketplace activity might require you to register and remit taxes there. If you’re a manufacturer or amulti-channel seller, the complexity multiples . That’s why it’s critical to have expert guidance. A knowledgeable eCommerce agency can help you navigate these laws across every channel–and avoid costly mistakes.

Sales Tax Automation: The Only Scalable Solution for Modern Retail Compliance In today’s fast-changing tax landscape, manual compliance just doesn’t cut it anymore. With ever-shifting regulations, state-by-state differences, and new fees cropping up each year, trying to track everything by hand is both risky and unsustainable. For modern eCommerce retailers looking to grow, sales tax automation isn’t just a nice-to-have—it’s essential. Tax automation software helps businesses accurately calculate, collect, and remit taxes in real time, no matter where customers are shopping from.

Sales tax automation not only reduces the risk of costly human errors, it also keeps your business agile in the face of constant legislative changes. Instead of reacting to every new law or scrambling during sales tax holidays, automation platforms stay updated and do the heavy lifting for you. That means you can focus on scaling your business, not drowning in spreadsheets. For any merchant looking to stay competitive, tax automation is the only truly scalable solution to keep compliance in check without slowing down growth.

Navigating Retail Tax Compliance in 2025 Requires Proactive Strategies and Automation Retail tax compliance in 2025 isn’t about reacting–it’s about getting ahead. The landscape is more complex than ever, and relying on manual methods or outdated systems could cost you time, money, and peace of mind.

Instead of going it alone, consider working with a partner who understands the terrain. At Smart Solutions, we help eCommerce merchants navigate the twists and turns of tax compliance with industry-leading tools and partners. Let’s book a meeting and get your business ready for a stress-free, compliant, and successful tax season.

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