Economic Nexus Thresholds by State (2026)

What economic nexus is

Before 2018, a business had to have a physical presence in a state for that state to require sales tax collection — the rule from Quill Corp. v. North Dakota². In June 2018 the Supreme Court overruled it. South Dakota v. Wayfair held that a state may require collection from a seller with no physical presence at all, provided the seller's economic contact with the state is substantial enough¹.

South Dakota's own law — $100,000 in sales or 200 transactions — was the version the Court reviewed and did not disturb, which is why almost every state copied those numbers. The $100,000 figure in 41 jurisdictions is not a coincidence; it is the number the Supreme Court declined to strike down.

For the concept behind the thresholds — physical, economic, affiliate and marketplace nexus, and the constitutional history that produced them — see what sales tax nexus is.

The full threshold table: all 50 states and DC

Revenue thresholds are the stable, load-bearing figures. Transaction counts are shown where a state still applies one, but they are being repealed on a rolling basis and sources disagree on the current list — so treat the transaction column as advisory and confirm it with the state before relying on it³.

The five states with no general sales tax

The three threshold shapes

Every state's rule is one of three shapes, and knowing which one you are looking at changes how you monitor it.

New York is worth reading carefully because it combines the two hardest features: the highest revenue threshold and a conjunctive test. You need more than $500,000 in sales and more than 100 transactions before the obligation attaches⁵. A business with $2M of New York revenue across 40 large orders has no economic nexus there.

What actually counts toward the threshold

This is where most self-assessments go wrong, because the intuitive answer — "the sales I collected tax on" — is usually the wrong measure.

• Most states count gross sales. Every dollar shipped into the state, including exempt sales, wholesale sales and sales for resale. A distributor whose entire $200,000 of Georgia revenue is exempt wholesale can still have economic nexus and a registration obligation — while owing no tax at all.
• A few count only retail or taxable sales. Where a state uses the narrower definition, exempt volume drops out and the threshold is genuinely harder to cross.
• Shipping and handling usually count where they are part of the sales price under that state's rules — see is shipping taxable by state.
• Marketplace sales vary. Some states exclude facilitated sales from your threshold; others include them in gross sales even though the platform remitted the tax. Keep the two revenue streams separate in your reporting so you can answer either way.

Measuring periods: when you crossed, not just whether

The Measuring period column in the table above is easy to skim past and expensive to ignore. States use three different windows:

1. Current or previous calendar year. The most common. Crossing at any point in either year triggers the obligation, and it typically persists through the following year even if sales fall back.
2. Preceding twelve months (rolling). Recalculated continuously, so you can cross in the middle of a month. These states need monitoring rather than an annual check.
3. A fixed twelve-month window ending on a set date. Connecticut measures to 30 September, for instance. Miss the date and you discover the obligation months late.

States also differ on how quickly collection must start after you cross — sometimes the next transaction, sometimes the first day of the next month or quarter. Registering promptly and letting the state assign the effective date is safer than back-dating your own guess.

Physical nexus and the inventory trap

Economic nexus gets the attention, but it is only half the test. A physical presence creates nexus on its own, with no threshold to cross — and the most commonly missed trigger is inventory storage. If you use Amazon FBA or a third-party 3PL and your goods sit in a warehouse in California or Pennsylvania, you likely have nexus in those states even if you have sold almost nothing to their residents.

Sellers using FBA should read Amazon FBA sales tax, because Amazon moves inventory between fulfilment centres without asking, and each new state is a new physical presence.

How to know if you have economic nexus

1. Pull sales by destination state. Export the last twelve months of orders grouped by ship-to state. Most ecommerce platforms report this directly. Include the order count as well as the dollar value, because some states still test both.
2. Decide which sales the state counts. Most states measure gross sales, including exempt and wholesale transactions. A few count only retail or taxable sales. Use the broadest figure first, then narrow it if the state's definition allows.
3. Work out whether marketplace sales are included. Separate your own-website revenue from marketplace-facilitated revenue. Some states exclude facilitated sales from your threshold and some include them, so keep the two figures apart rather than merging them.
4. Compare against the state's threshold and measuring period. Check the figure against the state's revenue threshold, and note whether the period is the current or previous calendar year or a rolling twelve months. The period is what decides when you crossed, not just whether.
5. Check for physical presence separately. Inventory in a warehouse, a remote employee, or attending a trade show can create nexus with no threshold at all. Run this test even in states where your sales are small.
6. Register before you collect. Collecting sales tax without a permit is illegal in most states. Register with the department of revenue, note the effective date they assign, and only then switch collection on.
7. Deal with any past exposure deliberately. If you crossed a threshold months or years ago, quietly registering going forward leaves the historical liability open. A voluntary disclosure agreement typically limits the lookback to three or four years and waives penalties.

What to do once you have nexus

Continue the compliance chain

• Crossed a nexus threshold — what now — the immediate next actions, in order.
• Marketplace facilitator laws — whether your Amazon and Etsy volume counts toward these thresholds.
• Origin vs destination sourcing — once you have nexus, which address decides the rate you charge.
• Filing frequency & due dates — what the ongoing obligation actually looks like after you register.
• Resale & exemption certificates — how to document the exempt sales that still count toward your threshold.
• SaaS taxability by state — having nexus does not mean your product is taxable.