Unsure where you owe sales or use tax
Run Your Nexus Risk CheckUnderstand how physical presence and revenue thresholds create sales tax registration requirements.
Track physical presence and economic thresholds across all states.
Physical nexus and economic nexus are two separate ways a business can create a sales tax obligation in a state.
Both forms independently trigger registration requirements.
Physical nexus is established when a business has a direct physical connection to a state.
Common physical nexus triggers include:
Inventory stored in third party fulfillment centers often creates nexus even if you have no employees in the state. 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.
Economic nexus is triggered by sales volume rather than physical presence.
Most states use:
Economic nexus applies to remote sellers shipping products or services into a state. Use Nexus Threshold Calculator to determine your trigger date. 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.
Physical Nexus
Economic Nexus
A business may have both simultaneously.
Physical nexus typically requires registration as soon as presence is established. Economic nexus requires registration once thresholds are exceeded.
In multistate operations, businesses often create physical nexus before realizing it due to:
Evaluate physical and economic triggers together when reviewing compliance. 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.
Marketplace sellers often assume they only need to evaluate economic nexus.
However:
Marketplace sellers should also review our Marketplace Nexus guide to understand how facilitator laws impact economic threshold calculations. Track inventory related risk using State Nexus Lookup Tool.
Both types must be evaluated for complete compliance. 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.
Effective monitoring includes:
Manual tracking becomes unreliable once operations scale across states. Use Economic Nexus Monitoring Software for consolidated tracking. Review risk exposure using Nexus Risk Score Tool. Estimate liability using Sales Tax Liability Estimator.
If physical or economic nexus is established and registration is delayed:
Calculate potential historical liability using Back Sales Tax Calculator.
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. Determine next steps using Nexus Registration Readiness Tool.
Evaluate physical presence and economic thresholds in one place.