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What sales tax nexus means
A state can only make a business collect its sales tax if the business has a strong enough connection to the state. That connection is called nexus. Once you have it, you register with the state, charge its sales tax to customers there, and file returns. Without it, the state can't require you to collect, and the buyer is supposed to pay use tax on the purchase instead.
There are two ways to get nexus:
- Physical nexus: you, your staff, your property or your inventory are in the state.
- Economic nexus: your sales into the state pass the state's threshold, even if you've never set foot there.
Each state decides its own rules, so you can have nexus in Texas and not in Ohio with the same business. You check state by state.
Physical nexus: being in the state
Physical presence has always created nexus. The details vary, but the Texas Comptroller's list of what counts as being engaged in business there is typical:
- A temporary or permanent location you run directly or through an agent, such as a kiosk, office, distribution center, sales room, sample room, warehouse or storage place.
- An employee or representative in the state who sells, delivers or takes orders for taxable items.
- A franchisee or licensee operating under your trade name who has to collect tax there.
- Being formed in the state, even with no other activity there.
Inventory counts too. California's tax department lists maintaining inventory in the state as physical presence. That includes products you store in a marketplace's fulfillment warehouse, which catches many online sellers who have never visited the state.
Economic nexus: selling into the state
For decades the Supreme Court said a state couldn't make a seller collect its tax without a physical presence there. That changed on June 21, 2018. In South Dakota v. Wayfair, Inc., the Court overruled that rule (from Quill and National Bellas Hess) and upheld a South Dakota law covering sellers that, each year, delivered more than $100,000 of goods or services into the state or made 200 or more separate sales there. The Court noted the law gave small sellers a safe harbor and didn't apply backward.
Every state with a sales tax followed with its own threshold. Today:
- 41 states set the threshold at $100,000 in sales.
- California, New York and Texas have the highest, at $500,000.
- 17 states still count transactions as well as dollars. Many others have dropped their 200-transaction test since 2018, including Illinois, Indiana, Kentucky, North Carolina and South Dakota.
- Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax. Alaska's cities and boroughs do, and the ones in the Alaska Remote Seller Sales Tax Commission use a $100,000 threshold for remote sellers.
Check one state
Enter what you sold into the state over its measurement period. This checks economic nexus only; a physical presence creates nexus on its own.
Economic nexus thresholds by state
The remote seller threshold in each state, how it's measured, and whether marketplaces collect for you. Each row links to the state's own page.
All 50 states and DC
| State | Economic nexus threshold | Measured over | Marketplaces collect | Source |
|---|---|---|---|---|
| Alabama | $250,000 in salesRetail sales into Alabama, taxable or notRemote sellers can collect a flat 8% through the Simplified Sellers Use Tax program. | Previous calendar year | Yes | Official |
| Alaska | $100,000 in sales (local tax)Gross sales into Alaska, including marketplace salesNo state sales tax. Local taxes in member towns are collected through the Alaska Remote Seller Sales Tax Commission. The 200-transaction test ended January 1, 2025. | Current or previous calendar year | Yes | Official |
| Arizona | $100,000 in salesDirect gross sales into Arizona; marketplace sales excludedArizona's transaction privilege tax (TPT) is a tax on the seller. | Previous or current calendar year | Yes | Official |
| Arkansas | $100,000 in sales or 200 transactionsSales into Arkansas | Current or previous year | Yes | Official |
| California | $500,000 in salesSales into California by you and related businesses | Previous or current calendar year | Yes | Official |
| Colorado | $100,000 in salesRetail sales into ColoradoCross it mid-year and you must collect from the first month that starts at least 90 days later. | Previous or current calendar year | Yes | Official |
| Connecticut | $100,000 in sales and 200 transactionsRetail sales into ConnecticutBoth tests must be met. | 12 months ending September 30 | Yes | Official |
| Delaware | No state sales taxDelaware taxes businesses' gross receipts instead of sales. | Not applicable | Not applicable | Official |
| District of Columbia | $100,000 in sales or 200 transactionsRetail sales into DC | Previous or current calendar year | Yes | Official |
| Florida | $100,000 in salesTaxable sales into Florida | Previous calendar year | Yes | Official |
| Georgia | $100,000 in sales or 200 transactionsRetail sales into Georgia | Previous or current calendar year | Yes | Official |
| Hawaii | $100,000 in sales or 200 transactionsGross income from HawaiiHawaii's general excise tax (GET) is a tax on the business, not a sales tax. | Current or previous calendar year | Yes | Official |
| Idaho | $100,000 in salesSales into Idaho, including marketplace sales | Current or previous calendar year | Yes | Official |
| Illinois | $100,000 in salesGross receipts from sales to Illinois buyersThe 200-transaction test ended January 1, 2026. | Previous 12 months, checked each quarter | Yes | Official |
| Indiana | $100,000 in salesGross revenue from sales into Indiana, including exempt salesThe 200-transaction test ended January 1, 2024. | Previous or current calendar year | Yes | Official |
| Iowa | $100,000 in salesGross revenue from Iowa sales | Previous or current calendar year | Yes | Official |
| Kansas | $100,000 in salesGross receipts from sales into Kansas, taxable and exempt | Current or previous calendar year | Yes | Official |
| Kentucky | $100,000 in salesGross receipts from sales into KentuckyThe 200-transaction test ended August 1, 2026. | Previous or current calendar year | Yes | Official |
| Louisiana | $100,000 in salesGross revenue from sales delivered into LouisianaRemote sellers register with and pay the Louisiana Sales and Use Tax Commission for Remote Sellers, not the Department of Revenue. | Previous or current calendar year | Yes | Official |
| Maine | $100,000 in salesGross sales of goods and taxable services into Maine | Previous or current calendar year | Yes | Official |
| Maryland | $100,000 in sales or 200 transactionsGross revenue from goods and taxable services delivered in Maryland | Previous or current calendar year | Yes | Official |
| Massachusetts | $100,000 in salesMassachusetts sales | Previous or current calendar year | Yes | Official |
| Michigan | $100,000 in sales or 200 transactionsGross sales to Michigan customers, taxable or notRegister and collect from January 1 of the year after you cross it. | Previous calendar year | Yes | Official |
| Minnesota | $100,000 in sales or 200 transactionsRetail sales shipped to Minnesota | Previous 12 months | Yes | Official |
| Mississippi | $250,000 in salesAll sales into Mississippi, including wholesale and exempt sales | Any 12 consecutive months | Yes | Official |
| Missouri | $100,000 in salesGross receipts from taxable sales in Missouri | Previous 12 months, checked each quarter | Yes | Official |
| Montana | No state sales tax | Not applicable | Not applicable | Official |
| Nebraska | $100,000 in sales or 200 transactionsRetail sales into Nebraska, including marketplace sales | Previous or current calendar year | Yes | Official |
| Nevada | $100,000 in sales or 200 transactionsRetail sales into Nevada | Previous or current calendar year | Yes | Official |
| New Hampshire | No state sales tax | Not applicable | Not applicable | Official |
| New Jersey | $100,000 in sales or 200 transactionsSales into New Jersey | Current or prior calendar year | Yes | Official |
| New Mexico | $100,000 in salesTaxable gross receipts from New MexicoNew Mexico's gross receipts tax (GRT) is a tax on the seller. | Previous calendar year | Yes | Official |
| New York | $500,000 in sales and 100 transactionsSales of goods delivered into New York, taxable or notBoth tests must be met. Once over, register within 30 days. | Previous four sales tax quarters | Yes | Official |
| North Carolina | $100,000 in salesGross sales into North Carolina, including marketplace salesThe 200-transaction test ended July 1, 2024. | Previous or current calendar year | Yes | Official |
| North Dakota | $100,000 in salesTaxable sales into North DakotaThe 200-transaction test was repealed in 2019. | Current or previous calendar year | Yes | Official |
| Ohio | $100,000 in sales or 200 transactionsGross receipts from sales to Ohio customers | Current or previous calendar year | Yes | Official |
| Oklahoma | $100,000 in salesTaxable sales into Oklahoma | Previous or current calendar year | Not stated | Official |
| Oregon | No state sales tax | Not applicable | Not applicable | Official |
| Pennsylvania | $100,000 in salesGross sales into Pennsylvania, taxable or not | Previous calendar year | Yes | Official |
| Rhode Island | $100,000 in sales or 200 transactionsSales into Rhode Island | Previous calendar year | Yes | Official |
| South Carolina | $100,000 in salesSales into South Carolina | Previous or current calendar year | Yes | Official |
| South Dakota | $100,000 in salesSales into South DakotaThe 200-transaction test ended July 1, 2023. | Previous or current calendar year | Yes | Official |
| Tennessee | $100,000 in salesRetail sales to Tennessee customers, not sales for resaleStarted at $500,000 in 2019 and dropped to $100,000 on October 1, 2020. | Previous 12 months | Yes | Official |
| Texas | $500,000 in salesTotal Texas revenue, taxable and nontaxableCollect by the first day of the fourth month after the month you cross it. | Previous 12 calendar months | Yes | Official |
| Utah | $100,000 in salesGross sales into UtahThe 200-transaction test ended July 1, 2025. | Previous or current calendar year | Yes | Official |
| Vermont | $100,000 in sales or 200 transactionsAll sales into Vermont | Any preceding 12 months | Yes | Official |
| Virginia | $100,000 in sales or 200 transactionsRetail sales into Virginia | Previous or current calendar year | Yes | Official |
| Washington | $100,000 in salesAll gross receipts from Washington, including wholesale and exempt salesThe 200-transaction test ended March 14, 2019. | Current or prior calendar year | Yes | Official |
| West Virginia | $100,000 in sales or 200 transactionsSales into West Virginia | Previous or current calendar year | Yes | Official |
| Wisconsin | $100,000 in salesGross sales into Wisconsin, taxable or notThe 200-transaction test ended February 20, 2021. | Previous or current calendar year | Yes | Official |
| Wyoming | $100,000 in salesGross sales into Wyoming, including wholesaleThe 200-transaction test was repealed in 2024. | Current or previous calendar year | Yes | Official |
No state matches that. Try its full name or two-letter code.
"Marketplaces collect" means the state makes marketplace facilitators, such as Amazon, Etsy and eBay, collect the tax on sales they process for you. A physical presence in a state creates nexus whatever your sales. Checked against each state's tax agency on November 9, 2026.
How states count your sales
Two sellers with the same revenue can be over the line in one state and under it in another, because states measure differently:
- Which sales count. Some states count all gross sales into the state, including tax-exempt sales and sales for resale. Others count only retail or only taxable sales. The "what counts" line under each threshold in the table uses the state's own wording.
- Over what period. Most states look at the previous or current calendar year. Some use the previous 12 months, and a few use the previous four quarters. A rolling period means you can cross the line in the middle of a year.
- When you have to start. Some states want you collecting right away, others from a set date after you cross. Texas, for example, gives you until the fourth month after the month your sales pass $500,000.
Keep a running total per state. Most online store and accounting software can report sales by destination state. Check it at least every quarter against the thresholds in the table above.
Selling through Amazon, Etsy or eBay
45 states have marketplace facilitator laws. They make the marketplace collect and remit sales tax on the sales it processes for third-party sellers, so on those orders you usually have nothing to collect.
Two things still catch marketplace sellers:
- Your own website. Sales on your own site, at markets, or by invoice aren't covered. Once you have nexus in a state, you collect on those yourself.
- Inventory in fulfillment centers. Stock held in a state's warehouse can give you physical nexus there, separate from any sales threshold.
What to do once you have nexus
- Register for a sales tax permit with the state's tax agency before you start collecting. Most states charge nothing. Our resale certificate and seller's permit guide lists what each state calls it and what it costs.
- Start charging tax on taxable sales into the state by the state's start date. Use the rate for the delivery address; our sales tax calculator has every state's base rate and a link to its official address lookup.
- File returns on the schedule the state gives you, usually monthly, quarterly or yearly depending on how much you collect.
- Keep exemption and resale certificates for any sale you didn't tax. Without one on file, the state can treat the sale as taxable.
Registering in several states at once. The Streamlined Sales Tax program lets remote sellers register in its member states through one free registration system (SSTRS). Sellers who qualify can also use a Certified Service Provider for tax calculation and filing in member states at no charge. The member states are Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming, with Tennessee as an associate member.
If you should already have been collecting
If you passed a threshold months or years ago, the tax you didn't collect is still owed, and it comes out of your pocket because you can't bill old customers for it. Don't just register and hope nobody asks. A voluntary disclosure agreement (VDA) is usually the better route:
- You register, file the missed returns and pay the tax plus interest for a limited number of past years, the lookback period.
- In return, the state waives some or all of the penalties and agrees not to assess tax for the years before the lookback period. That protection doesn't cover tax you collected from customers but never paid in.
- Through the Multistate Tax Commission's program, you can apply to several states at once and stay anonymous to each state until you sign its agreement.
Timing matters. You're only eligible if you haven't filed returns or paid that tax to the state before, aren't being audited by it, and haven't been contacted by it about the tax. A tax professional can help you decide which states to approach.
Other taxes are a separate question
Sales tax nexus doesn't settle whether you owe a state's income or franchise tax, or need to register your LLC there as a foreign company. Those follow different rules. Our foreign qualification guide explains when an LLC needs to register in another state.
Frequently asked questions
What is sales tax nexus?
Nexus is the connection between a business and a state that lets the state require the business to collect its sales tax. You can have it through a physical presence, such as an office, employees or inventory in the state, or through economic nexus, which comes from the amount you sell into the state.
What is economic nexus?
Economic nexus means a state can make you collect its sales tax because of how much you sell there, even if you have no office, staff or inventory in the state. The Supreme Court allowed it in South Dakota v. Wayfair (2018). Every state with a statewide sales tax now has an economic nexus rule, and 41 of them set the line at $100,000 in sales a year.
Do I have to collect sales tax in every state I sell to?
No. You only collect in states where you have nexus: where you have a physical presence, or where your sales pass the state's economic nexus threshold. Below the threshold, and with no physical presence, the state can't make you collect, though your customer may owe use tax.
Do marketplace sales count toward my threshold?
It depends on the state. 45 states require marketplace facilitators like Amazon, Etsy and eBay to collect tax on the sales they process, so you usually don't collect on those sales yourself. States differ on whether those sales still count toward your own threshold, so check the "what counts" line for each state in the table.
What happens if I pass a threshold and don't register?
The state can assess the tax you should have collected, plus interest and penalties, and you can't go back and charge your customers. If you're already behind, a voluntary disclosure agreement usually limits how many years you owe for and waives penalties.
Is sales tax nexus the same as income tax nexus?
No. They are separate tests under separate laws. Having to collect a state's sales tax doesn't automatically mean you owe its income or franchise tax, and the reverse is true too. Check each tax on its own.
Sources
We take every fee, deadline and rule on this page from these pages and nowhere else. Rules change, so open the source before you pay anything.
- 1.U.S. Supreme Court: South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018)Checked November 9, 2026
- 2.Texas Comptroller: Engaged in Business (Publication 94-108)Checked November 9, 2026
- 3.Texas Comptroller: Remote sellersChecked November 9, 2026
- 4.CDTFA: Tax Guide for the Marketplace Facilitator ActChecked November 9, 2026
- 5.Streamlined Sales Tax Governing Board: member statesChecked November 9, 2026
- 6.Streamlined Sales Tax: remote seller FAQs (free SSTRS registration)Checked November 9, 2026
- 7.Multistate Tax Commission: Multistate Voluntary Disclosure ProgramChecked November 9, 2026
- 8.Multistate Tax Commission: Voluntary disclosure FAQ (eligibility and lookback)Checked November 9, 2026
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