How growing businesses keep up with economic nexus
Learn about resources to help manage expanding sales tax obligations
The 2021 Sales Tax Changes Report
If you read our 2021 Sales Tax Changes Report, you know the impact of COVID-19 dominated the sales tax landscape in 2020. Many businesses have expressed concern about how they’ll keep up with this dramatic change in economic behavior, worrying they are correctly managing new taxes and nexus exposure. Read on to see programs and resources that can help your business remain compliant.
Understanding economic nexus
Economic nexus is a tax collection obligation imposed on companies based solely on a certain level of economic activity within a state. Unlike nexus that’s based on physical presence, economic nexus is based entirely on sales revenue, transaction volume, or a combination of both. Like many sales tax laws, economic nexus criteria vary by state and can be confusing. Review our state-by-state guide to economic nexus laws for specific information on every state with an economic nexus law.
How to determine if economic nexus laws impact your business
If you’re a current Avalara AvaTax customer, try out the economic nexus tracker within AvaTax to see if you’re approaching or might have exceeded an economic nexus threshold. We’ll compare the sales activity that flowed through AvaTax against each state’s unique sales or transaction thresholds and evaluation periods to alert you if you have a new obligation.
Questions on this feature? View additional details in this help center article.
The five steps to managing sales tax
Understanding the ins and outs of sales tax can be confusing. View the basic steps you need to consider to be compliant.