Economic Nexus: A State by State Reality
There is no single national rule. Here is how to think about nexus across many states.
Economic nexus is not one national rule but a patchwork where each state decides how much selling into it creates an obligation. Thresholds vary in amount and basis, physical presence is not required, and a sale that matters in one state is harmless in another, so you have to assess exposure state by state.
Fifty different rulebooks
Economic nexus is not one rule but a patchwork. Each state decides for itself how much selling into it creates an obligation, which means your exposure has to be considered state by state, not as a single number. Related: Multi State Selling Without the Panic
Keep reading: How to Know When You Are Approaching Nexus, Registering in a New State, Step by Step, Sales Tax Filing Frequencies Explained. See how ShopTaxie helps you sales tax nexus tracking and filing reminders.
Thresholds differ
States set their own thresholds, commonly based on sales revenue or transaction count. What crosses the line in one state may be well short of it in another, so a sale that matters in one place is harmless in another. Related: Registering in a New State, Step by Step
You can owe where you have never been
The defining feature of economic nexus is that physical presence is no longer required. Enough remote sales into a state can create an obligation there, even with no office, staff, or inventory in the state. Related: How to Know When You Are Approaching Nexus
Track each state separately
Because the rules vary, the only reliable approach is to watch your sales against each state's threshold individually. That is how you see exposure building before it becomes a missed obligation. Related: What Counts Toward a Nexus Threshold
- Nexus is a patchwork, decided state by state
- Thresholds vary in amount and basis
- You can owe tax in a state you never visited
- Track your sales against each state separately
Julien Jimenez
Julien Jimenez is an independent software builder based in Paris. He designs, ships, and operates focused SaaS products for small businesses and independent professionals. Read the full author page.
Frequently asked questions
Do all states use the same nexus threshold?
No. States set their own thresholds, commonly based on sales revenue or transaction count, and the numbers differ. What crosses the line in one state may be well short of it in another.
Can I have nexus in a state I have never physically been to?
Yes. The defining feature of economic nexus is that physical presence is no longer required. Enough remote sales into a state can create an obligation there, even with no office, staff, or inventory.
Know where you owe before it is a problem
Sales tax nexus tracking and filing reminders. ShopTaxie is built to help you put this into practice.
Check my nexusMore from the ShopTaxie blog
How to Know When You Are Approaching Nexus
Registering in a New State, Step by Step
Sales Tax Filing Frequencies Explained
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