TrustFile > Blog > Sales Tax > Which States Collect Sales Tax for Click-through Nexus?

Which States Collect Sales Tax for Click-through Nexus?

  • Sales Tax
  • September 19, 2015 | Ryan O'Donnell

We've covered click-through nexus in previous posts. However, as is common in the world of sales tax collection and the internet, things changed almost every day! With that in mind, we wanted to take a look at the current landscape of click-through nexus. We'll look at things state-by-state to give you the complete picture for today's modern, ecommerce seller.

Affiliate Marketing

For those who are unfamiliar with click-through nexus, let's take a moment to cover the basics. If you've every heard of affiliate marketing, it is very similar. Affiliate marketers are paid to promote goods and services on the internet through banner advertisements, online reviews, blog posts, and other types of content. Should someone read this content and proceed to purchase the product, the affiliate marketer gets a cut of the sale.

For years, this type of relationship (a type of pseudo-employee) has been a grey area for state tax authorities. Clearly there was a connection between the affiliate marketer and the company selling the product. However, the connection is unlike any that existed prior to the rise of ecommerce and the internet. As such, state governments were unclear how to proceed.

All that is changing, however, as more and more states enact new click-through nexus laws aimed to recoup lost sales tax revenue. Many people point to the state of New York as the catalyst for increased pressure on ecommerce sellers utilizing affiliate marketers when, in 2008, they enacted a law that required internet retailers to collect and remit sales on affiliate internet sales. This has become popularly known as the "Amazon Law".

Minimum Threshold

Every state has a minimum threshold from total gross receipts made as a result affiliate relationships sellers need to reach before they are considered to have triggered click-through nexus. If your affiliate sales are below this threshold, you don't have to worry about triggering nexus with online sales from affiliate partners. This is great news for ecommerce sellers who are just getting started with affiliate marketing. You're not going to be hit with click-through nexus on day one. We've included the thresholds with each state listed below.

Click-through Nexus Presumption

Every law falls into two categories: rebuttable and irrebuttable. A rebuttable law can be challenged in court. An irrebuttable law cannot. Each state has its own position on click-through nexus law and it's rebuttable or irrebuttable. We've included that as well so you know where you stand with the state.

States With Click-through Nexus Laws

Arkansas

  • Threshold: More than $10,000 in sales during the preceding 12 months.
  • Presumption: Arkansas has a rebuttable presumption.

California

  • Threshold: More than $10,000 and more than $1 million in annual in-state sales.
  • Presumption: California has a rebuttable presumption.

Connecticut

  • Threshold: More than $2,000 during the preceding four quarterly periods.
  • Presumption: Connecticut has no rebuttable presumption.

Georgia

  • Threshold: More than $50,000 in the preceding 12 months.
  • Presumption: Georgia has a rebuttable presumption.

Illinois

  • Threshold: More than $10,000 in the preceding four quarterly periods.
  • Presumption: Illinois has a rebuttable presumption.

Kansas

  • Threshold: More than $10,000 during the preceding 12 months.
  • Presumption: Kansas has a rebuttable presumption.

Maine

  • Threshold: More than $10,000 during the preceding year.
  • Presumption: Maine has a rebuttable presumption.

Michigan

  • Threshold: More than $10,000 during the immediately preceding 12 months.
  • Presumption: Michigan has a rebuttable presumption.

Minnesota

  • Threshold: More than $10,000 in the 12-month period ending on the last day of the most recent calendar quarter before the calendar quarter.
  • Presumption: Minnesota has a rebuttable presumption.

Missouri

  • Threshold: More than $10,000 in the preceding 12 months.
  • Presumption: Missouri has a rebuttable presumption.

Nevada

  • Threshold: More than $10,000 in $10,000 during the preceding four quarterly periods ending on the last day of March, June, September and December.
  • Presumption: Nevada has a rebuttable presumption.

New Jersey

  • Threshold: More than $10,000 in the prior four quarterly periods.
  • Presumption: New Jersey has a rebuttable presumption.

New York

  • Threshold: More than $10,000.
  • Presumption: New York has a rebuttable presumption.

North Carolina

  • Threshold: More than $10,000 during the preceding four quarterly periods.
  • Presumption: North Carolina has a rebuttable presumption.

Pennsylvania

  • Threshold: There is no threshold specified, so assume you owe sales tax if you have click-thru nexus.
  • Presumption: Pennsylvania has no presumption on the books.

Rhode Island

  • Threshold: More than $5,000 during the four preceding quarterly periods.
  • Presumption: Rhode Island has a rebuttable presumption.

Tennessee

  • Threshold: More than $10,000 during the preceding 12 months.
  • Presumption: Tennessee has a rebuttable presumption.

Vermont (Goes into effect December 1, 2015)

  • Threshold: More than $10,000 in the preceding tax year.
  • Presumption: Vermont has a rebuttable presumption.

Washington

  • Threshold: More than $10,000 in the preceding tax year.
  • Presumption: Washington has a rebuttable presumption.

Avalara Author
Ryan O'Donnell
Avalara Author Ryan O'Donnell