What to Do When a State Sends You a Notice

0:49 The four types of notices and what they mean

Let me walk you through the four types of notices you might receive.

First, nexus questionnaires. These ask if you have nexus in the state. They want information about your sales, whether you have inventory there, or any other connection to the state. They're gathering information. They think you might have nexus, but they're confirming.

The second one is missing return notices. These show up when you're registered but haven't filed a return. The state expected one from you and they didn't get it. They'll usually list the specific period you missed and give you a deadline to file.

Audit letters. These tell you the state is opening a formal review of your sales tax compliance. They'll ask for records. They'll assign someone to work with you. They'll give you a timeline. This is a formal examination, not just a question.

Assessment notices. These tell you the state has calculated what you owe. They'll show the amount, explain how they calculated it, and give you a deadline to either pay or appeal. This is a determination, not a question.

Each one requires a different approach. Knowing which you have is step one.

1:51

Let's break down what each type is really telling you.

A nexus questionnaire is an information request. The state thinks you might have nexus. They're giving you a chance to explain your situation. If you handle this correctly, you might still qualify for a VDA. You might still be able to negotiate. You might still be able to shape how this plays out.

A missing return notice means you're in their system. You're registered. They're tracking whether you file. This is about administrative compliance. The fix is usually straightforward. File the missing returns even if the amount owed is zero.

An audit letter means they're doing a formal review. VDAs aren't available for that state anymore, but you can still provide documentation. You can still explain discrepancies. You can still work with them on payment plans. You're just in a different process.

Now, an assessment notice means they've done the math. You have a window to appeal if you think the calculation is wrong. Usually 30 to 60 days. If you don't respond in that window, the assessment becomes final.

2:50 What to do before you respond

Here's where knowing what to do in what order matters.

Don't respond immediately without thinking it through. I know the letter feels urgent, but taking a day or two to understand your full situation is worth it. If you get a nexus questionnaire and immediately confirm you've had nexus for five years, you just set your own lookback period. If you pause to assess whether you qualify for a VDA, you could file that first and potentially limit penalties.

Get accurate information before you answer. If a questionnaire asks when you first had nexus, don't guess. Pull your actual sales records. Check when you first stored inventory there. Verify when you crossed the threshold. Your answer creates a record. Make sure it's based on real data.

Responding is better than not responding. I'm not saying ignore the notice. I'm saying understand what you're responding to before you respond. Every notice has a response deadline and meeting that deadline matters. You just want to make sure you're giving yourself the best chance at a good outcome.

3:53 Response deadlines by notice type

Different notices have different timelines.

Nexus questionnaires usually give you 30 to 45 days. That's usually enough time to assess your exposure and determine if a VDA makes sense, but only if you start right away.

Missing return notices typically give you 30 days. You need to file the missing returns or explain why you can't. If you miss the deadline, the state might file estimated returns on your behalf, and they tend to estimate high.

Audit letters usually give you 30 to 60 days for initial documentation. The audit itself takes longer, but that first deadline sets the tone.

Assessment notices give you 30 to 60 days to appeal. This is your window to dispute the calculation if you think it's wrong. After that window closes, the assessment stands.

4:37 When you need help and when you don't

Now, let's talk about when you need help versus when you don't. Not every notice requires outside help.

You can probably handle a missing return notice yourself. If you're already registered, you just missed a filing, the amount is small, you have the documentation ready, file it, pay any small penalties, move forward.

You might want help with a nexus questionnaire if you have significant sales in that state. You've been selling there for years without registering. You have exposure in other states, too. Because how you respond to one state can affect your options in others. This is where getting guidance helps you avoid unforced errors.

You probably want help with an audit letter. Audits involve specific documentation requirements and formal processes. Having someone who understands what auditors are looking for makes the process smoother.

You definitely want help with an assessment notice. You have a short window. The appeal process is formal. The documentation requirements are specific. This is worth getting right the first time.

5:35 What matters and what getting it right looks like

Here's what matters. Different sales tax notices require different responses.

Nexus questionnaires are information requests. They're your chance to file a VDA if you qualify. Missing return notices are administrative. File the returns even if you owe zero. Audit letters mean formal review. VDAs aren't available, but other options are. Assessment notices are determinations. You have a limited window to appeal.

Don't respond immediately without understanding what you have. Get real data before answering questions about your history. Response timing matters. Know your deadline and what happens if you miss it. Simple issues can be self-handled. Complex exposure benefits from guidance.

6:17

Here's what I see when sellers get this right. They receive a notice. They're not sure what it means. We review it together. We identify the type. We check the deadline. We look at their full picture. Then we figure out the right move.

Sometimes that's filing a VDA before responding to a questionnaire. Sometimes it's just filing the missing return. Sometimes it's gathering documentation for an audit. Sometimes it's appealing an assessment with better numbers. But what happens is they go from "I don't know what this means" to "I know exactly what to do next."

The notice becomes manageable. They have a plan. They know the timeline. They know what it costs. That's what good information does. It turns confusion into clarity.

6:56 Getting your notice reviewed

If you've received a sales tax notice and you're not really sure what to do about it, let's talk through it. Schedule a free discovery call with our team. We work with seven and eight figure ecommerce sellers every day to help them navigate their sales tax compliance. We can review your notice with you. We can help you understand what type it is, what your deadline is, and what your best response looks like. The link is in the description.

Or if you want to get a better sense of where you stand before talking to anyone, take our free sales tax risk assessment. It takes about five minutes. You answer a few questions about your business. Then you get a personalized report that shows you exactly where you stand. If you're in good shape, we'll tell you. We'll show you what to monitor so you stay that way. If you have gaps, we'll show you what they are, how urgent they are, and what your options look like. If you have significant exposure, we'll walk you through your options like VDAs, direct registration, payment plans, and realistic timelines. The link is in the description.

The right response starts with understanding what you have.