Sales Tax Savvy
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Learn how sales tax actually works for interior designers, how economic nexus affects your projects across state lines, and how to keep your business compliant even when every state plays by different rules.
If you’ve ever felt confused about when to collect sales tax, why thresholds differ, or how to handle multi-state projects, this conversation will clarify everything. We walk through real scenarios, state-by-state differences, and the hidden rules designers often discover only after they’ve already crossed a threshold.
Julia Nikishina, Founder of New Age Financial Consulting, is one of the design industry’s top experts on sales tax and compliance. She explains the truth behind economic nexus, why states interpret your work differently, and how to avoid the costly mistakes designers make when projects span multiple states.
Inside this discussion, you’ll learn the real-world practices top firms rely on:
Understanding Economic Nexus
Julia breaks down how the Wayfair ruling changed everything, from physical presence laws to revenue-based thresholds, and why designers can owe sales tax in a state long before ever stepping foot in it. You’ll learn how thresholds reset, which states use $100K vs. $500K rules, and why some states count non-taxable sales toward nexus.
Final Destination Rules, Simplified
You’ll understand why sales tax is based on where the product ends up, not where you or your client live. Whether you reside in New York and your client is renovating in Florida, the tax belongs to Florida. Julia shows how to track this correctly so you charge the right tax at the right time.
Resale Certificates & When You Must Register
Before collecting any tax, you must have a resale certificate in that state. Julia explains the timing, the application process, why some states issue them instantly while others mail physical copies, and how to know exactly when you’re required to register.
Why States Treat Your Services Differently
Some states tax design fees, some don’t, and some tax them only under certain conditions. Julia illustrates how states like New York and California interpret design work, why deliverables (emailed vs. presented in person) can change taxability, and why design and architecture fees must be researched separately.
Communicating Changes With Clients
When you cross a threshold mid-project, you can’t always return to clients and request retroactive tax payments without damaging trust. Julia explains how high-performing firms handle timing, phase transitions, and client conversations to keep relationships intact while staying fully compliant.
How Contract Language Impacts Taxability
States like Florida and California evaluate design fees based on how they relate to tangible product. Julia shows how wording in your proposal can change whether a service is taxable and why clarity around product-related fees is critical for protecting your business.
Multi-State Project Planning
You’ll learn how to review revenue across all active states, evaluate what’s being purchased where, and map out which states you must register in next. Julia walks through how firms working in five, seven, or ten states keep everything organized and avoid compliance gaps.
This is a must-watch for any designer working across state lines, or planning to. You’ll walk away with the clarity, confidence, and practical knowledge you need to charge sales tax correctly, protect your firm, and build a cleaner, more compliant backend as your projects grow.
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Hi everyone. My name is Julia Nikishina. I run an accounting firm that specializes in the interior design industry, and today we’re talking about sales tax, one of the most confusing but important parts of running a design business. Sales tax has changed dramatically since the 2018 Wayfair case, when the Supreme Court allowed states to tax businesses based on economic activity, not physical presence. That ruling reshaped everything. Now, every state has its own threshold, its own rules, and its own definition of what counts as taxable.
For designers, this matters because you don’t just provide services, you also buy and sell product. That puts your firm under economic nexus rules, not just physical location rules. In the past, you only charged tax where you had a studio. Today, if you sell enough product or have enough transactions in a state, that state can legally require you to collect and remit tax, even if you’ve never been there. Some states tax design fees, others don’t. Some include your non-taxable sales in their threshold. Some treat the same service as taxable depending on how deliverables were sent. The lack of consistency is what makes this difficult.
Sales tax is what we call an escrow tax, like payroll tax, you collect it on behalf of the government and then remit it. That’s why the consequences for mishandling it can be serious. And it’s also a final-destination tax. Tax is based on where the product ends up, not where you or the client live. If installation is in Florida, you charge Florida tax. Before you collect anything, you need a resale certificate for that state. You must first confirm nexus, then open the certificate, then begin collecting and remitting properly.
Economic thresholds differ across states. Many are one hundred thousand dollars or two hundred transactions, but big states like California, Texas, and New York use five hundred thousand dollars. Thresholds reset every calendar year, which affects when you register. Some states issue resale certificates instantly, while others mail physical copies and can even send them to the wrong address. And some states, like Pennsylvania, count non-taxable sales toward the threshold, meaning you may need to open a resale certificate even if you won’t be collecting any tax until next year.
If you’re working across multiple states, you need a clear view of your revenue and type of work in each one. If you haven't been collecting where you should have, you can’t always go back to a client at the end of a project and say they suddenly owe a large lump sum. That can damage trust. In those cases, we look at project timing. If phase one is wrapping up and phase two begins soon, that break is usually the right moment to explain you’ve crossed nexus and must begin charging tax moving forward. It gives the client context and keeps the relationship intact.
Some states complicate things further by taxing services depending on how they’re delivered. New York is a prime example. Design fees are taxable there, but whether they’re taxable for out-of-state clients may depend on whether you emailed deliverables or physically presented them. Emailing from New York to another state may create a taxable event. Presenting in person may not. California is similarly unclear, and both states treat design and architecture fees differently. In New York, design fees and unlicensed architectural fees are taxable, but licensed architectural services are not. If your firm offers both, you need to research them separately for every state.
Language also matters. States like Florida and California interpret “design services tied to the sale of tangible property” differently, which can turn a non-taxable fee into a taxable one depending on how it’s described in the contract. Something as simple as designing a custom sofa may count as part of a taxable sale. This is why understanding how your services connect to product is critical.
So that’s the bigger picture: sales tax is complicated, inconsistent, and state-specific, but understanding economic thresholds, destination rules, resale certificates, and how states classify your services is the foundation for staying compliant. Once you know how each state treats your work and where your revenue is growing, you can collect correctly, protect your business, and communicate clearly with clients when tax obligations change.
