What triggers sales tax nexus in New York?

Sales tax nexus in New York is triggered through economic nexus thresholds, physical presence, inventory, or certain marketplace activities.

What is New York economic nexus?

Economic nexus applies when a business exceeds 100 sales and 500000 dollars in gross receipts delivered into New York during the prior four sales tax quarters.

Do marketplace sellers need to register in New York?

Some marketplace sellers must still register and file sales tax returns even when a marketplace collects tax on their behalf.

Can sales tax exposure exist even if tax was never collected?

Yes. Sales tax exposure often exists before registration or tax collection occurs.

New York Sales Tax Nexus and Exposure Guide

Q: Does SaaS trigger sales tax nexus in New York?

SaaS and digital products may trigger sales tax exposure depending on taxability rules and whether economic nexus thresholds are exceeded.

New York sales tax nexus rules are among the most aggressively enforced in the United States. Businesses selling into New York often trigger sales tax exposure earlier than expected due to economic nexus thresholds, marketplace facilitator rules, local tax complexity, and strong audit activity. Sales tax exposure in New York can exist even when a business has no physical presence, no employees, and does not collect tax at checkout. The key is understanding when New York sales tax nexus applies, what triggers compliance obligations, and how to decide next steps without creating unnecessary risk.

What creates sales tax nexus in New York

New York sales tax nexus can be created through physical presence, economic activity, or marketplace sales.

Common nexus triggers include:

Exceeding economic nexus thresholds
Inventory stored in New York
Employees or contractors working in the state
Marketplace sales that still require registration or filing
Affiliate or referral relationships

Once nexus exists, registration and filing obligations may apply.

New York economic nexus thresholds

New York enforces economic nexus for remote sellers based on both revenue and transaction volume.

Economic nexus is triggered when, during the previous four sales tax quarters, a business has:

More than 100 sales of tangible personal property delivered into New York AND
More than $500,000 in gross receipts from those sales

Once both thresholds are exceeded, the business is considered to have sales tax nexus in New York. Economic nexus applies even if tax was not collected and even if sales occurred through online channels.

Marketplace facilitator rules in New York

New York requires marketplace facilitators to collect and remit sales tax on behalf of sellers in many cases. However, marketplace collection does not always eliminate seller obligations.

Marketplace sellers may still be required to:

Register with New York
File sales tax returns
File zero returns
Report direct sales outside the marketplace

Marketplace rules vary by transaction type and reporting structure. Sellers should not assume full compliance based solely on marketplace collection.

Local sales tax complexity in New York

New York sales tax includes state and local components.

Local sales taxes vary by county and jurisdiction. Businesses may be required to:

Track destination-based rates
Report local tax separately
File consolidated or jurisdiction-specific returns

Local tax complexity increases compliance risk and audit exposure, especially for ecommerce and SaaS businesses.

Common sales tax exposure scenarios in New York

Sales tax exposure in New York often develops in the following situations:

Remote sellers exceeding economic nexus thresholds without realizing it
Marketplace sellers with direct sales outside platforms
SaaS and digital product sellers misunderstanding taxability
Businesses registering late after collecting tax
Businesses filing incorrectly based on assumptions

Exposure can exist even when no tax is currently owed.

Common misconceptions about New York sales tax nexus

Selling into New York does not always require registration. Marketplace collection does not remove all obligations. Economic nexus applies only after thresholds are crossed. Registering too early can create unnecessary filing burdens. Exposure does not always mean penalties are due.

Clarity before action is critical.

What New York sales tax exposure means

Sales tax exposure in New York may include:

Periods where registration should have occurred
Missed sales tax filings
Incorrect tax collection assumptions
Local tax reporting gaps
Penalties and interest over time

Not all exposure requires immediate remediation. Prioritization matters.

How to decide next steps for New York sales tax compliance

A practical approach includes:

Step 1

Confirm whether economic or physical nexus exists

Step 2

Determine when thresholds were crossed

Step 3

Identify whether registration or filing is required

Step 4

Separate states requiring action from those that do not

Step 5

Decide next steps before filing or paying anything

This approach avoids unnecessary compliance mistakes.

How TaxMap helps with New York sales tax nexus

TaxMap helps businesses:

Identify New York sales tax nexus triggers
Determine likely nexus start dates
Understand exposure risk by period
Avoid unnecessary registrations
Prepare clean outputs for CPAs and advisors

TaxMap supports structured compliance decisions for growing and established businesses.

Check Your Exposure

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Frequently asked questions

Sales tax nexus is triggered through economic thresholds, physical presence, inventory, or certain marketplace activities.

Economic nexus applies when a business exceeds 100 sales and $500,000 in gross receipts delivered into New York during the prior four quarters.

Some marketplace sellers are still required to register and file, even if the marketplace collects tax.

Does SaaS trigger sales tax nexus in New York?

SaaS and digital products may create exposure depending on taxability and economic nexus thresholds.

Can exposure exist even if I never collected tax?

Yes. Exposure often exists before registration or collection occurs.