Sales tax nexus determines when a business is legally required to register, collect, and remit sales tax in a state.
For growing businesses, nexus often exists long before anyone realizes it. This hub explains how nexus is created, how it is commonly missed, and what to do after it is discovered.
This page serves as a central guide to all sales tax nexus concepts and resources.
What Is Sales Tax Nexus
Sales tax nexus is the connection between a business and a state that creates a tax obligation.
Nexus can be created through:
- Economic activity
- Physical presence
- Certain marketplace or affiliate relationships
Once nexus exists, compliance obligations may apply even if the business has never registered.
Types of Sales Tax Nexus
Sales tax nexus generally falls into two categories.
Economic Nexus
Economic nexus is triggered when a business exceeds a state’s revenue or transaction thresholds, even without physical presence.
Most states now enforce economic nexus rules for:
- Ecommerce sellers
- SaaS companies
- Subscription businesses
- Remote service providers
Economic nexus is the most common source of unexpected compliance exposure.
Physical Nexus
Physical nexus is created by tangible presence in a state.
This includes:
- Offices or warehouses
- Employees or contractors
- Inventory or equipment
- Temporary business activity
Physical nexus often creates obligations earlier than businesses expect.
Why Sales Tax Nexus Is Commonly Missed
Sales tax nexus is frequently missed because:
- Thresholds vary by state
- Data is spread across systems
- Marketplace rules create confusion
- Legacy tools focus on filing, not discovery
Many businesses discover nexus years after obligations begin.
What Happens After Nexus Is Created
Nexus creation does not require immediate action, but it does require analysis.
After nexus is identified, businesses should:
- Confirm trigger dates
- Quantify sales tax exposure
- Evaluate use tax exposure
- Prioritize states by risk
- Decide if voluntary disclosure is appropriate
- Choose a filing strategy deliberately
Acting without analysis often increases cost and complexity.
Sales Tax Nexus Resources
Use the guides below to understand specific nexus scenarios in detail.
Core Nexus Guides
- What Is Sales Tax Nexus
- Physical Nexus vs Economic Nexus
- Economic Nexus Thresholds by State Explained
Risk and Discovery
Sales Tax Nexus by State
Sales tax nexus rules differ by jurisdiction.
Explore state specific nexus rules here:
- Economic nexus thresholds by state
- Physical presence rules
- Marketplace facilitator requirements
For a complete breakdown, visit:
Sales Tax Nexus and Exposure
Sales tax nexus determines obligation. Exposure determines risk.
Businesses should always evaluate nexus together with:
- Sales tax exposure
- Use tax exposure
- Filing timing
Nexus without exposure may not require immediate action. Exposure without nexus may still create use tax obligations.
Who This Guide Is For
This guide is built for:
- Founders and operators
- Finance and accounting teams
- CPAs and advisors
- Growing and mid market businesses
- Enterprise organizations managing multi state activity
Final Thought
Sales tax nexus is not a one time event.
As businesses grow, enter new markets, and change operations, nexus evolves. The businesses that manage nexus proactively avoid audits, penalties, and rushed filings.
Clarity comes before action.
