Unsure where you owe sales or use tax
Run Your Nexus Risk CheckSales tax nexus is the legal connection between your business and a state that requires you to register, collect, and remit sales tax.
You create sales tax nexus through:
Once nexus is established, registration is required even if you are not headquartered in that state.
Sales tax nexus defines when a business has sufficient connection to a state to be subject to its sales tax laws.
There are two primary categories:
Both can independently create registration obligations. Nexus does not depend on profitability. It depends on activity within 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.
Physical nexus is created when your business has tangible presence in a state.
Common triggers include:
Even temporary presence may create nexus depending on state rules. 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.
Economic nexus is triggered by revenue or transaction volume, regardless of physical presence.
Most states use:
Use the 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.
Nexus is created the moment a threshold is exceeded or a physical presence trigger occurs.
However, registration deadlines vary by state:
Failure to register after nexus is established can result in:
Use the Nexus Registration Readiness Tool to determine timing. 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 facilitator laws shift collection responsibility to platforms in many states.
However:
See Marketplace Nexus for detailed rules. Track marketplace thresholds using Marketplace Nexus Tracker. Marketplace sellers should also review our Marketplace Nexus guide to understand how facilitator laws impact economic threshold calculations.
Businesses selling across multiple states must evaluate nexus separately in each jurisdiction.
Common mistakes include:
Continuous monitoring is required once you approach thresholds. Use Rolling 12 Month Nexus Tracker for automated tracking. Review ongoing risk with Nexus Risk Score Tool.
Nexus and registration are not the same.
If nexus existed in prior periods, liability may already exist before registration. Estimate historical liability using Sales Tax Liability Estimator. Calculate potential back taxes with Back Sales Tax Calculator.
Effective nexus monitoring includes:
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.
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.