Unsure where you owe sales or use tax
Run Your Nexus Risk CheckEconomic nexus is created when a business exceeds a state’s sales or transaction threshold, requiring sales tax registration even without physical presence.
Most states trigger economic nexus when you exceed:
Once nexus is established, you are legally required to register and collect sales tax.
Economic nexus is a sales tax obligation created solely by economic activity in a state.
It does not require:
Instead, nexus is triggered by sales volume or transaction count. This standard became widespread after the 2018 Supreme Court decision in South Dakota v Wayfair. Today, nearly every state with sales tax enforces economic nexus thresholds.
If you are new to multistate sales tax, start with our full Economic Nexus guide to understand how revenue thresholds create obligations. You can also review the Sales Tax Nexus overview to see how physical and economic triggers work together.
States use different standards to determine when nexus is created.
Common models include:
For a full breakdown see Economic Nexus Thresholds by State. For state lookup use the State Nexus Lookup Tool.Because thresholds and measurement periods vary by jurisdiction, we recommend reviewing our Economic Nexus by State breakdown along with the full Economic Nexus Thresholds by State guide for detailed comparisons.
Aggregate Sales by State
Apply State Specific Threshold Rules
Identify First Month Threshold Was Crossed
Determine Registration Requirement Date
Many businesses miscalculate nexus because they:
For automated tracking see Rolling 12 Month Nexus Tracker.
Physical nexus arises from:
Economic nexus arises from revenue alone. Some businesses may have both simultaneously. If you are unsure whether you need to register now, see When Do I Have to Register for Sales Tax for state specific timing rules and practical examples.
Remember that revenue is only one trigger. Inventory, remote employees, and warehouses may create physical nexus even before thresholds are exceeded. See Physical vs Economic Nexus for a side by side comparison.
Once economic nexus is established, registration is generally required immediately or in the following month depending on state law.
Failure to register may result in:
Use the Nexus Registration Readiness Tool to evaluate timing. If liability already exists, use the Back Sales Tax Calculator.
Marketplace facilitator laws shift collection responsibility in many states.
However:
See Marketplace Nexus for detailed rules. Use Marketplace Nexus Tracker for threshold monitoring. Marketplace sellers should also review our Marketplace Nexus guide to understand how facilitator laws impact economic threshold calculations.
Manual tracking becomes unreliable as multistate sales increase.
Continuous monitoring should include:
Instead of manually testing spreadsheets, you can automate multistate monitoring with our Economic Nexus Monitoring Software, which applies rolling 12 month calculations and state specific threshold rules in real time.
After nexus is established you must:
Review risk using the Nexus Risk Score Tool. If you believe nexus may have been triggered in prior periods, use the Sales Tax Liability Estimator and Back Sales Tax Calculator to evaluate potential exposure before registering.