Complete Sales Tax Nexus Guide

Everything you need to know about sales tax nexus in all 50 states + DC

Last updated: January 2024

Understanding Sales Tax Nexus

Economic Nexus

Triggered by reaching sales or transaction thresholds in a state, even without physical presence.

• Most common threshold: $100,000 in sales
• Some states also have transaction thresholds (typically 200)
• Lookback period varies by state (current year, prior year, or rolling 12 months)

Physical Nexus

Created by having a physical presence or conducting certain activities in a state.

• Having employees, offices, or warehouses
• Storing inventory (including FBA)
• Attending trade shows or events
• Using drop shippers in the state

Important Note

Having nexus means you must register for a sales tax permit and collect sales tax from customers in that state. Most states require registration within 30-60 days of establishing nexus.

State-by-State Nexus Thresholds

Click on any state for detailed information

State	Sales Threshold	Transaction Threshold	Registration Deadline
Alaska AK	No Sales Tax	-	-
Delaware DE	No Sales Tax	-	-
Montana MT	No Sales Tax	-	-
New Hampshire NH	No Sales Tax	-	-
Oregon OR	No Sales Tax	-	-
Alabama AL	$250,000	-	Next month after exceeding
Arizona AZ	$100,000	-	31 days
Arkansas AR	$100,000	200	61 days
California CA	$500,000	-	Immediately
Colorado CO	$100,000	-	90 days
Connecticut CT	$100,000	200	60 days
District of Columbia DC	$100,000	200	30 days
Florida FL	$100,000	-	30 days
Georgia GA	$100,000	200	30 days
Hawaii HI	$100,000	200	30 days
Idaho ID	$100,000	-	30 days
Illinois IL	$100,000	200	30 days
Indiana IN	$100,000	200	30 days
Iowa IA	$100,000	-	30 days
Kansas KS	$100,000	-	60 days
Kentucky KY	$100,000	200	30 days
Louisiana LA	$100,000	200	30 days
Maine ME	$100,000	200	30 days
Maryland MD	$100,000	200	30 days
Massachusetts MA	$100,000	-	30 days
Michigan MI	$100,000	200	30 days
Minnesota MN	$100,000	200	60 days
Mississippi MS	$250,000	-	30 days
Missouri MO	$100,000	-	30 days
Nebraska NE	$100,000	200	30 days
Nevada NV	$100,000	200	30 days
New Jersey NJ	$100,000	200	30 days
New Mexico NM	$100,000	-	30 days
New York NY	$500,000	100	20 days
North Carolina NC	$100,000	200	60 days
North Dakota ND	$100,000	-	60 days
Ohio OH	$100,000	200	30 days
Oklahoma OK	$100,000	-	30 days
Pennsylvania PA	$100,000	-	30 days
Rhode Island RI	$100,000	200	30 days
South Carolina SC	$100,000	-	30 days
South Dakota SD	$100,000	200	30 days
Tennessee TN	$100,000	-	30 days
Texas TX	$500,000	-	30 days
Utah UT	$100,000	200	30 days
Vermont VT	$100,000	200	30 days
Virginia VA	$100,000	200	30 days
Washington WA	$100,000	-	30 days
West Virginia WV	$100,000	200	30 days
Wisconsin WI	$100,000	200	30 days
Wyoming WY	$100,000	200	60 days

Physical Nexus Creating Activities

Physical Location

Offices, stores, warehouses, or any permanent physical presence

Employees

Employees working in the state, including remote workers

Inventory

Inventory stored in warehouses, fulfillment centers, or consignment

Sales Representatives

Sales reps, agents, or independent contractors making sales

Delivery Vehicles

Company-owned vehicles making deliveries in the state

Trade Shows

Attending trade shows or conventions to make sales

Drop Shipping

Using third-party suppliers located in the state

Temporary Presence

Installation, repair, or service activities in the state

What to Do When You Have Nexus

Determine Registration Deadline

Most states require registration within 30-60 days of establishing nexus. Check the specific deadline for each state.

Register for Sales Tax Permit

Apply for a sales tax permit through the state's Department of Revenue website. You'll need your EIN and business information.

Configure Tax Collection

Set up your e-commerce platform or point-of-sale system to collect the correct tax rates for each jurisdiction.

File Regular Returns

File sales tax returns based on your assigned frequency (monthly, quarterly, or annually) and remit collected taxes.

Frequently Asked Questions

Do marketplace sales count toward economic nexus thresholds?

It depends on the state. Most states with marketplace facilitator laws exclude marketplace sales from your threshold calculation, but some states like Alabama, Kansas, and Missouri include all sales. Check each state's specific rules.

What happens if I don't register when I have nexus?

Failure to register and collect sales tax when required can result in:

Back taxes owed plus interest
Penalties ranging from 10-25% of tax due
Criminal charges in severe cases
Personal liability for business owners

How do I calculate the lookback period?

States use different lookback periods:

Current calendar year: January 1 to December 31 of the current year
Previous calendar year: January 1 to December 31 of the prior year
Rolling 12 months: The immediate preceding 12 months from any point in time
Current or previous: If you meet the threshold in either period

Do I need to collect tax immediately after hitting a threshold?

Most states provide a grace period of 30-90 days to register after exceeding thresholds. However, some states like California require immediate registration and collection. Always check the specific state's requirements and err on the side of caution.

Automate Your Sales Tax Compliance

Stop worrying about nexus thresholds. Let SalexTax monitor your obligations and alert you when action is needed.