Sales Tax Guide · Updated
Economic Nexus Thresholds by State
Published · Reviewed by the USA Sales Tax Calculator editorial team.
Economic nexus is the rule that requires an out-of-state seller to collect sales tax even without a store, warehouse, or employee in the state. Before the Supreme Court's 2018 decision in South Dakota v. Wayfair, a seller generally needed physical presence. After Wayfair, every state with a sales tax has adopted some economic threshold, usually measured by gross receipts, transaction count, or both. Crossing a threshold does not automatically register the seller, but it starts the clock for registration and collection.
How the thresholds are structured
There is no single national rule. Some states use a $100,000 sales threshold alone; some use $100,000 or 200 transactions, whichever comes first; a few use $500,000; and a handful count only retail sales rather than gross revenue. The measurement period also varies: most states use the previous or current calendar year, some use the previous four quarters, and a few use a rolling 12-month period. When a state uses a transaction threshold, a marketplace sale may or may not count toward it depending on whether the state treats the marketplace facilitator as the seller.
Threshold patterns at a glance
| Pattern | Typical states | What to watch |
|---|---|---|
| $100,000 only | California, New York, Texas, Illinois, Pennsylvania | Gross sales usually include taxable and exempt sales; some states exclude marketplace sales. |
| $100,000 or 200 transactions | Alabama, Colorado, Florida, Georgia, Washington | The "or" means either test can trigger nexus, even if the other is far below. |
| $500,000 | Arizona, Massachusetts, North Dakota, Ohio | Higher revenue bar, but some of these states still count transactions separately or apply local nexus rules. |
| Retail-sales-only measure | Several states with exempt wholesale channels | Exempt resale and wholesale receipts may not count toward the threshold. |
| No state sales tax | Alaska, Delaware, Montana, New Hampshire, Oregon | No state-level collection, but Alaska local boroughs and cities may still impose local requirements. |
The measurement period decides the date
The threshold is only half the question; the measurement window tells you when you crossed it. A seller that uses a calendar-year test may cross $100,000 in November and owe collection from January 1 of the following year, while a rolling four-quarter test may trigger collection within a month or two of the sale that pushed the trailing total over the line. Most states give sellers a short registration window after the trigger, often 30 to 60 days, and some allow voluntary registration before the threshold is crossed.
Keep a rolling ledger by state: gross sales, taxable sales, transaction count, marketplace sales, and direct sales. Review it monthly. A spreadsheet that only totals national revenue will miss the state where you crossed a threshold first. If you sell through multiple channels, tag every order with the ship-to state and the facilitator that collected tax, because marketplace sales often need to be excluded from your own threshold calculations and from your own returns.
Marketplace sales and facilitator rules
Nearly every state with a sales tax now has a marketplace facilitator law. When Amazon, Etsy, Shopify's marketplace tools, Walmart, or another facilitator collects and remits tax on a third-party sale, the facilitator is generally treated as the seller for that transaction. That does not erase the underlying seller's registration and recordkeeping duties, and it does not always exclude the sale from the seller's economic nexus count. Some states count all sales toward the threshold but only require the seller to collect on direct sales; others exclude facilitated sales entirely. Read the state's marketplace guidance alongside its nexus rule rather than assuming the facilitator's tax collection covers everything.
A seller with $90,000 of direct sales and $40,000 of marketplace sales may be over a $100,000 gross threshold in a state that counts all sales, even though the marketplace already collected on the $40,000. The seller may still need to register and file a return showing the facilitated sales as exempt or zero-rated. The guide tomarketplace facilitator laws covers the mechanics in more detail.
Physical presence still matters
Economic nexus is an additional basis for collection, not a replacement for physical presence. A warehouse, office, employee, contractor, inventory held on consignment, or even a temporary trade-show booth can create physical nexus at a much lower sales level. Some states also impose nexus through affiliated entities or click-through referrals. If you have any physical footprint, assume the state can require collection regardless of the economic threshold, and check the state's rule for services and digital products as well as tangible goods.
What to do after crossing a threshold
- Register for a sales tax permit in the state, using the state's online portal.
- Set the correct combined rate for each destination address, not just the state base rate.
- Configure your storefront or invoicing system to collect on taxable goods and services.
- Keep exemption certificates for resale and wholesale customers.
- File returns on the state's assigned frequency, even in months with zero sales.
- Reconcile marketplace reports with your own direct-sales reports.
Use the state calculators to check the destination rate:California,Texas,Florida,New York,Washington, andColorado are common first registrations for remote sellers. For the sourcing rules that decide whether the destination or origin rate applies, read theorigin vs. destination guide. The methodology page explains how the rate data behind each calculator is verified.
Nexus is not the same as taxability
Crossing an economic nexus threshold tells you that a state may require you to register and collect. It does not tell you that every product you sell is taxable. A state can require registration while exempting the specific goods or services you sell. For example, a seller of exempt grocery food may still have to register and file a zero-rated return in a state where it has nexus. The registration obligation and the taxability obligation are separate analyses, and both need to be documented.
The same separation applies to local rates. A state-level threshold may trigger collection, but the rate you collect depends on the destination address and the state's sourcing rule. A home-rule state may have dozens of local jurisdictions, each with its own rate and filing requirements. Thelocal tax guide explains how those layers stack, and thesourcing guideexplains which address controls.
Keep a written nexus file for each state: the threshold, the measurement period, the date you crossed it, the registration date, the filing frequency, and the product taxability conclusion. When a state auditor asks why you started collecting in a particular month, the file is the answer. It also helps when a threshold changes or when a marketplace begins collecting on your behalf.