--- title: "They Started A Popular Side Hustle Thinking They Were 'Killing It.' Two Years Later They Owe $28K In Sales Tax Across 12 States" type: "News" locale: "en" url: "https://longbridge.com/en/news/286289414.md" description: "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." datetime: "2026-05-13T15:46:11.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286289414.md) - [en](https://longbridge.com/en/news/286289414.md) - [zh-HK](https://longbridge.com/zh-HK/news/286289414.md) --- # They Started A Popular Side Hustle Thinking They Were 'Killing It.' Two Years Later They Owe $28K In Sales Tax Across 12 States 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. ## The Numbers Don’t Add Up? “Felt like I was killing it, first real business ever,” the seller wrote. “Never thought about sales tax.” **Don't Miss:** - **See how a tax-aware retirement strategy could help improve your 2026 outlook — match with a financial adviser today.** - **Find out if you qualify to reduce your monthly debt payments — see how much you could save with a quick, free consultation.** 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.” ## Tax Professionals Recommend A Second Opinion 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. 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