A small business owner who thought they had built a successful online side hustle says they were blindsided after discovering they may owe roughly $28,000 in back sales taxes, penalties and interest across 12 states.



The seller shared the story in Reddit’s r/tax, explaining that they started a custom print-on-demand T-shirt business through Etsy and Shopify and quickly reached about $50,000 in sales.



<h2>The Numbers Don’t Add Up?</h2>



“Felt like I was killing it, first real business ever,” the seller wrote. “Never thought about sales tax.”



Don't Miss:



<ul>
<li>See how a tax-aware retirement strategy could help improve your 2026 outlook — match with a financial adviser today.</li>



<li>Find out if you qualify to reduce your monthly debt payments — see how much you could save with a quick, free consultation.</li>
</ul>



The poster said they assumed they were safe because they operated out of California while using a Texas-based printer for fulfillment. They kept filing personal income taxes normally while ignoring sales tax settings inside Shopify.



But things changed when an accountant reviewed Stripe payment reports while preparing tax returns. “He pulls my Stripe reports and his face goes white,” they said.



“Turns out I hit economic nexus in 12 states last year alone,” the seller wrote. “Smashed it in places like Texas, New York, Florida without collecting a dime.”



Their accountant estimated roughly $28,000 in liabilities while the business account only had $12,000 left.



However, many commenters quickly questioned whether the numbers actually made sense.



“How could you have economic nexus in 12 states with only 50k of sales?” one commenter asked.



Others pointed out that states like Texas and New York have very high economic nexus thresholds, often requiring around $500,000 in annual in-state sales before businesses are required to collect sales tax.



Trending: Earn While You Scroll: The Deloitte-Ranked #1 Software Company Growing 32,481% Is Opening Its $0.50/Share Round to Investors



“This math isn’t mathing,” another commenter wrote.



Several tax professionals in the thread suggested the seller may have misunderstood how marketplace platforms like Etsy work.



“Either you or your accountant is confused,” one commenter added. “Etsy is the entity, and Etsy collects and remits all sales tax. Etsy is the one who has reached Nexus, not you.”



<h2>Tax Professionals Recommend A Second Opinion</h2>



A number of accountants and sales tax specialists encouraged the seller to consult someone who specifically handles multistate sales tax compliance instead of relying on a general CPA.



“You need to get a sales tax specialist to look at your case,” one commenter wrote.



Another licensed CPA who works on multi-state tax cleanup cases explained that the seller’s actual exposure could depend heavily on how much revenue came directly through Shopify versus Etsy.



“Marketplace facilitator rules – Etsy collects on your behalf in most states, which usually wipes your direct liability there,” the CPA wrote.



See Also: What If Your Investment Income Didn't Rely Entirely on Market Swings? Some Investors Are Taking a Different Approach



The conversation eventually turned into a bigger discussion about how confusing online sales taxes have become for small business owners as more states started enforcing stricter “economic nexus” rules in recent years.



Many Shopify sellers said they didn’t realize at first that they had to turn on sales tax settings themselves and only figured it out later after their businesses started growing.



Others warned that even if the numbers were exaggerated, business owners should still take compliance seriously.



“The key is not to sit on it because these balances can grow pretty fast with penalties and interest over time,” one commenter wrote.



As online businesses scale, navigating multi-state tax rules and marketplace obligations has become increasingly complex. Some small business owners turn to financial advisers and tax professionals to help ensure compliance and avoid unexpected liabilities tied to rapid growth.



Read Next: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100.



<h2>Building Wealth Across More Than Just the Market</h2>



Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, professional financial guidance, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry.



Connect Invest



Connect Invest is a real estate investment platform that allows investors to access short-term, fixed-income opportunities backed by a diversified portfolio of residential and commercial real estate loans. Through its Short Notes structure, investors can choose defined terms (6, 12, or 24 months) and earn monthly interest payments while gaining exposure to real estate as an asset class. For investors focused on diversification, Connect Invest may serve as one component within a broader portfolio that also includes traditional equities, fixed income, and other alternative assets—helping balance exposure across different risk and return profiles.



Mode Mobile



Mode Mobile is changing the way people interact with their phones by letting users earn money from the same apps and activities they already use every day. Instead of platforms keeping all the advertising revenue, Mode Mobile shares a portion back with users who engage with content, play games, and scroll on their devices. Named one of Deloitte's fastest-growing software companies in North America, the company has built a large beta user base and is scaling a model that turns everyday smartphone usage into a potential income stream. For investors, Mode Mobile offers exposure to the expanding mobile advertising and attention economy through a pre-IPO opportunity tied to a new approach to user monetization.



rHealth



rHealth is building a space-tested diagnostics platform designed to bring lab-quality blood testing closer to patients in minutes rather than weeks. Originally validated in collaboration with NASA for use aboard the International Space Station, the technology is now being adapted for at-home and point-of-care settings to address widespread delays in diagnostic access.



Backed by institutions including NASA and the NIH, rHealth is targeting the large global diagnostics market with a multi-test platform and a model built around devices, consumables, and software. With FDA registration in progress, the company is positioning itself as a potential shift toward faster, more decentralized healthcare testing.



Direxion



Direxion specializes in leveraged and inverse ETFs designed to help active traders express short-term market views during periods of volatility and major market events. Rather than long-term investing, these products are built for tactical use—allowing investors to take magnified bullish or bearish positions across indices, sectors, and single stocks. For experienced traders, Direxion offers a way to respond quickly to changing market conditions and act on high-conviction views with greater flexibility.



Immersed



Immersed is a spatial computing company building immersive productivity software that enables users to work across multiple virtual screens inside VR and mixed-reality environments. Its platform is used by remote workers and enterprises to create virtual workspaces that reduce reliance on traditional physical hardware while improving focus and collaboration. The company is also developing its own lightweight VR headset and AI productivity tools, positioning itself in the future-of-work and spatial computing space. Through its pre-IPO offering, Immersed is opening access to early-stage investors looking to diversify beyond traditional assets and gain exposure to emerging technologies shaping how people work.



Arrived



Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100. This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.



Masterworks



Masterworks enables investors to diversify into blue-chip art, an alternative asset class with historically low correlation to stocks and bonds. Through fractional ownership of museum-quality works by artists like Banksy, Basquiat, and Picasso, investors gain access without the high costs or complexities of owning art outright. With hundreds of offerings and strong historical exits on select works, Masterworks adds a scarce, globally traded asset to portfolios seeking long-term diversification.



Public



Public is a multi-asset investing platform built for long-term investors who want more control, transparency, and innovation in how they grow wealth. Founded in 2019 as the first broker-dealer to offer commission-free, real-time fractional investing, Public now lets users invest in stocks, bonds, options, crypto, and more—all in one place. Its latest feature, Generated Assets, uses AI to turn a single idea into a fully customized, investable index that can be explained and backtested before committing capital. Combined with AI-powered research tools, clear explanations of market moves, and an uncapped 1% match for transferring an existing portfolio, Public positions itself as a modern platform designed to help serious investors make more informed decisions with context.



AdviserMatch



AdviserMatch is a free online tool that helps individuals connect with financial advisors based on their goals, financial situation, and investment needs. Instead of spending hours researching advisors on your own, the platform asks a few quick questions and matches you with professionals who can assist with areas like retirement planning, investment strategy, and overall financial guidance. Consultations are no-obligation, and services vary by advisor, giving investors a chance to explore whether professional advice could help improve their long-term financial plan.



Accredited Debt Relief



Accredited Debt Relief is a debt consolidation company focused on helping consumers reduce and manage unsecured debt through structured programs and personalized solutions. Having supported more than 1 million clients and helped resolve over $3 billion in debt, the company operates within the growing consumer debt relief industry, where demand continues to rise alongside record household debt levels. Its process includes a quick qualification survey, personalized program matching, and ongoing support, with eligible clients potentially reducing monthly payments by 40% or more. With industry recognition, an A+ BBB rating, and multiple customer service awards, Accredited Debt Relief positions itself as a data-driven, client-focused option for individuals seeking a more manageable path toward becoming debt-free.



Finance Advisors



Finance Advisors helps Americans approach retirement with greater clarity by connecting them to vetted, fiduciary financial advisors who specialize in tax-aware retirement planning. Rather than focusing on products or investment performance alone, the platform emphasizes strategies that account for after-tax income, withdrawal sequencing, and long-term tax efficiency—factors that can materially impact retirement outcomes. Free to use, Finance Advisors gives individuals with meaningful savings access to a level of planning sophistication historically reserved for high-net-worth households, helping reduce hidden tax risk and improve long-term financial confidence. 



Image: Shutterstock

SHOP

ONLN

SHPU

EBIZ

IBUY

A small business owner, who thought they were thriving with a custom T-shirt side hustle, faces a shocking $28,000 sales tax liability across 12 states. Operating from California and using a Texas printer, they neglected sales tax settings on Shopify. An accountant revealed they hit economic nexus thresholds in multiple states, raising concerns among commenters about the accuracy of these claims. Tax professionals advised seeking a specialist for multistate compliance, highlighting the complexities of online sales tax regulations as businesses grow.

benzinga_article

Shopify 

ProShares Online Retail

VanEck Retail ETF

Direxion Daily SHOP Bull 2X ETF

SPDR S&P Retail ETF

Global X E-commerce ETF

Amplify Online Retail ETF

ETSY

They Started A Popular Side Hustle Thinking They Were 'Killing It.' Two Years Later They Owe $28K In Sales Tax Across 12 States