What Counts Toward a Nexus Threshold
Not every sale is measured the same way. Here is what actually goes into the count.
States measure a nexus threshold differently, counting total sales revenue, the number of transactions, or either. They also differ on which sales count, such as whether exempt or wholesale sales are included, and marketplace sales can count even when the marketplace remits the tax. Measuring the right way avoids a false sense of safety.
Revenue, transactions, or both
States measure nexus differently. Some count total sales revenue into the state, some count the number of transactions, and some use either. Which measure applies changes when you cross the line. Related: Economic Nexus: A State by State Reality
Keep reading: Economic Nexus: A State by State Reality, How to Know When You Are Approaching Nexus, Registering in a New State, Step by Step. See how ShopTaxie helps you sales tax nexus tracking and filing reminders.
Which sales are included
States also differ on which sales count toward the threshold, such as whether certain exempt or wholesale sales are included. These details matter, because they can move you closer to or further from a threshold than a simple revenue total suggests. Related: How do you count marketplace sales toward an economic nexus threshold when the platform already collects tax?
Marketplace sales can count
Sales made through a marketplace can still contribute to your threshold in a state, even when the marketplace remits the tax. Overlooking them can understate how close to nexus you really are. Related: How to Know When You Are Approaching Nexus
Measure it correctly
Because the rules vary, tracking the right measure for each state, on the right sales, is what makes your exposure picture accurate. A rough count can hide a threshold you have already crossed. Related: Registering in a New State, Step by Step
- States count revenue, transactions, or either
- Which sales are included varies by state
- Marketplace sales can count toward your threshold
- Measure the right way to avoid a false sense of safety
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 marketplace sales count toward my nexus threshold?
They can. Sales made through a marketplace can still contribute to your threshold in a state even when the marketplace remits the tax. Overlooking them can understate how close to nexus you really are.
Do exempt or wholesale sales count toward a threshold?
It depends on the state. Some include certain exempt or wholesale sales in the count and some do not, so those details can move you closer to or further from a threshold than a plain revenue total suggests.
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
Economic Nexus: A State by State Reality
How to Know When You Are Approaching Nexus
Registering in a New State, Step by Step
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