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Retail Sales Tax Compliance: It Never Goes Out of Season

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Tal Bar David

The boom in eCommerce clothing sales has created a significant shift in the retail industry. With this shift comes the need to understand retail sales tax in a booming market.

As an eCommerce seller, you need to understand the exemptions and clothing tax laws of the states you’re selling in. Otherwise, your lack of understanding is a handicap not only to your eCommerce business but to your customers as well. 

So let’s take a look at how different states approach clothing sales tax for retail and eCommerce businesses. 

Clothing sales tax isn’t one-size-fits-all

Sales tax compliance for retail businesses has always been a vital consideration. But as soon as retail sales tax turns into Commerce sales, compliance is seen as far more complex. But it doesn’t have to be. 

The most common misconception when it comes to retail tax is that clothing items are all taxable or that they are taxed the same way. That simply isn’t the case. Clothing sales tax varies from state to state and is influenced by product, price, and retail period. 

Retail sales tax applies to clothing sales in most states. But many have unique exemptions that you have to stay aware of. California, for instance, exempts sales tax for nonprofit organizations and thrift stores that provide clothing to the disadvantaged. 

But there are states where clothing is exempt from sales tax, with specific terms specific to each state. For example, a pair of jeans priced under $110 in New York, will be exempt from sales tax. But once the price tag crosses the $110 mark, the same pair of jeans will carry a $4 state sales tax. 

Another example is Minnesota, where clothing is generally tax-exempt. However, sales tax is applicable on items such as accessories, certain protective equipment, and recreational clothing. 

And then there are also the “tax holidays” that help to reduce the costs of retail purchases for consumers during periods such as schools reopening in the fall. These periods, when sales tax is waived on essential items, also promote healthy spending to boost the economy. 

Automating retail sales tax in an eCommerce setting

Navigating eCommerce marketplace tax laws in the USA can be a daunting task. But when you have the automation and integration capabilities of Complyt on your side, it all seems a lot less daunting. 

Navigating eCommerce marketplace tax laws in the USA

When using an automated platform, you can calculate state-specific retail sales tax on your product catalog in a matter of a few clicks. 

No more manual calculations or tiresome research to find state tax laws. With instant, automated sales tax calculations, filing, and remittance, eCommerce sales tax compliance is made simple. 

Working effectively with resellers and resale permits

When your customers include resellers, the more efficiently and reliably you remit sales tax the stronger the relationships you’re building with valuable clientele. 

The Complyt platform lets you verify sales permits without the risk, ensuring you remit tax only when selling to authorized resellers. 

Price right the first time

By applying the correct sales tax the first time around, you create a reliable eCommerce retail experience for your customers with prices that don’t fluctuate as you learn the ropes of eCommerce sales tax. 

A more reliable pricing experience equals a more reliable customer journey and improved customer loyalty. 

Complyt: Making retail sales tax compliance fashionable again

Sales tax solutions should help you make compliance easy again and help your customers benefit from the exemptions you should be incorporating in your price list. 

So when looking for a tax partner that can help you comply with sales tax regulations, finding a tax platform that offers simplicity and ease of use is essential. 

Complyt does just that, bringing simplicity back to one of the most complex tax processes around. 

With an easy-to-use platform that integrates with your eCommerce stores and dedicated support from a team of specialists who have supported some of the world’s biggest eCommerce brands, Complyt is the answer to your compliance headache. 


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