Sales tax laws by state > Economic nexus

Economic nexus: Find out where you’re on the hook to collect and file sales tax

Q: What is economic nexus?

Economic nexus is a connection between a state and business when annual sales revenue and/or transaction quantity reach a threshold set by the state requiring you to register for sales tax.

Out-of-state sales can trigger tax obligations known as economic nexus.

Illustration of the concept of economic nexus with a state map.

Avalara can help you track where you owe, register, and file.

Identify where and what triggers economic nexus for sales tax

Economic nexus for sales tax is triggered by reaching a certain amount of sales (e.g., $100,000) and/or a number of sales transactions (e.g., 200 transactions) in another state.
Exempt sales of goods and services may count toward your sales tax economic nexus threshold in some states.
You need to register to collect sales tax in states where you have economic nexus.

Take the free economic nexus assessment

What is economic nexus?

Economic nexus is a connection between a state and a business that allows the state to require the business to register to collect and remit sales tax. It’s established when a business reaches a certain threshold of sales revenue and/or number of transactions in the state.

Who does economic nexus affect?

Economic nexus impacts businesses with no physical presence in a state (also known as remote sellers) that sell goods and services in the state and meet or exceed the state’s economic nexus threshold.

Economic nexus thresholds Taxable transactions and exempt sales

Economic nexus thresholds

Avalara Nexus Map Legend with State Tax Rules

Taxable transactions illustration with a shopping cart, money, and calculator

Taxable transactions and exempt sales

Exempt sales can count toward your nexus threshold, so you may need to register and report these sales.
Some states only count exempt sales of tangible personal property, others include exempt services.

Learn more about exempt sales

Economic nexus details by state

Alabama economic nexus threshold: $250,000 in sales only

Included transactions:

Total retail sales of tangible personal property delivered into the state
Sales made through a non-collecting marketplace
Exempt sales

Excluded transactions:

Sales made through a registered marketplace facilitator
Exempt wholesale sales
Exempt services

Effective date:

October 1, 2018

Evaluation period:

Previous calendar year

Alaska economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Statewide gross sales of goods, property, or products delivered into the state
Services (taxable and exempt) rendered in the state
Sales made through a registered marketplace facilitator
Exempt sales

Excluded transactions:

None

Effective date:

Varies by district

Evaluation period:

Current or previous calendar year

Arizona economic nexus threshold: $100,000 in sales only

Included transactions:

Gross proceeds of sales of tangible personal property or services
Gross income derived from business in the state
Services (taxable and exempt) rendered in the state
Exempt sales

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

October 1, 2019

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$200,000 in sales only as of January 1, 2019
$150,000 in sales only as of January 1, 2020
$100,000 in sales only as of January 1, 2021

Arkansas economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Aggregated sales of taxable tangible personal property or services
Taxable services
Digital codes
Specified digital products subject to Arkansas sales or use tax delivered into a state

Excluded transactions:

Exempt sales
Exempt services
Sales made through a registered marketplace facilitator

Effective date:

July 1, 2019

Evaluation period:

Current or previous calendar year

California economic nexus threshold: $500,000 in sales only

Included transactions:

Total combined sales of tangible personal property delivered into the state by the retailer and all persons related to the retailer
Nontaxable sales (e.g., sales for resale)
Sales made through a registered marketplace facilitator

Excluded transactions:

Services (taxable and exempt)

Effective date:

April 1, 2019

Colorado economic nexus threshold: $100,000 in sales only

Included transactions:

Retail sales of tangible personal property delivered into the state
Commodities delivered into the state
Services (taxable and exempt) rendered in the state
Exempt sales

Excluded transactions:

Exempt wholesale sales
Sales made through a registered marketplace facilitator

Effective date:

December 1, 2018

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$100,000 or 200 transactions prior to April 14, 2019

Connecticut economic nexus threshold: $100,000 and 200 transactions

Included transactions:

Gross receipts from tangible personal property (including digital products and SaaS) sold into the state
Exempt sales
Taxable services
Sales made through a registered marketplace facilitator

Excluded transactions:

Sales for resale
Exempt services

Effective date:

July 1, 2019

Evaluation period:

Threshold applies to all transactions within the 12-month period ending on September 30 immediately preceding the monthly or quarterly period when liability is established

Previous threshold rules:

$250,000 and 200 transactions prior to June 30, 2019

Included transactions:

Gross receipts from tangible personal property sold into the state
Exempt sales in sales threshold only

Excluded transactions:

Sales for resale in transactions threshold only
Exempt services
Taxable services
Digital products and SaaS

Florida economic nexus threshold: $100,000 in sales only

Included transactions:

Taxable sales of tangible personal property delivered physically into the state

Excluded transactions:

Exempt sales
Services (taxable and exempt)
Sales made through a registered marketplace facilitator

Effective date:

July 1, 2021

Evaluation period:

Previous calendar year

Georgia economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross revenue from retail sales of tangible personal property delivered electronically or physically to a location in the state for consumption, use, or storage in the state
Exempt sales

Excluded transactions:

Services (taxable and exempt)
Exempt resales
Sales made through a registered marketplace facilitator

Effective date:

January 1, 2019

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$250,000 or 200 transactions prior to January 1, 2020

Hawaii economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross income or gross proceeds of tangible personal property delivered in the state
Intangible property delivered in the state
Services (taxable and exempt) delivered or consumed in the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

July 1, 2018

Evaluation period:

Current or previous calendar year; applies to tax years beginning January 1, 2018

Idaho economic nexus threshold: $100,000 in sales only

Included transactions:

Cumulative gross receipts from sales including taxable products and taxable services delivered into the state
Exempt sales
Exempt services
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

June 1, 2019

Evaluation period:

Current or previous calendar year

Illinois economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Cumulative gross receipts from sales
Exempt sales

Excluded transactions:

Occasional sales
Sales for resale
Services
Sales made through a registered marketplace facilitator

Effective date:

October 1, 2018 (for state use tax)
January 1, 2021 (for local use tax)

Evaluation period:

Quarterly review based on preceding 12-month period

Previous threshold rules:

Sales made through a marketplace facilitator excluded as of January 1, 2020

Indiana economic nexus threshold: $100,000 in sales only

Included transactions:

Gross revenue from sales of tangible personal property
Electronically delivered products into the state
Electronically delivered services into the state
Exempt sales
Services (taxable and exempt)
Sales for resale

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

October 1, 2018

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$100,000 in sales or 200 transactions prior to January 1, 2024

Iowa economic nexus threshold: $100,000 in sales only

Included transactions:

Gross revenue from sales of tangible personal property
Specified electronically delivered products
Electronically delivered services into the state
Exempt sales
Services (taxable and exempt)
Sales for resale
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

January 1, 2019

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$100,000 or 200 transactions prior to July 1, 2019

Kansas economic nexus threshold: $100,000 in sales only

Included transactions:

Cumulative gross receipt from sales by the retailer to customers in Kansas
Exempt sales
Services (taxable and exempt)
Digital products and SaaS
Sales made through a registered marketplace facilitator
For marketplace facilitators, threshold is based on taxable sales

Excluded transactions:

None

Effective date:

July 1, 2021

Evaluation period:

Current or previous calendar year

Kentucky economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross receipts from sales of tangible personal property delivered or transferred electronically into the commonwealth
Digital property delivered or transferred electronically into the commonwealth
Exempt sales
Taxable services
Sales made through a registered marketplace facilitator

Excluded transactions:

Exempt services

Effective date:

October 1, 2018

Evaluation period:

Current or previous calendar year

Previous threshold rules:

Taxable services excluded prior to January 1, 2023

Louisiana economic nexus threshold: $100,000 in sales only

Included transactions:

Gross revenue from sales of products delivered into the state
Electronically transferred products
Services (taxable and exempt) rendered in the state
Exempt sales
For marketplace facilitators, threshold is based on remote retail sales

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

July 1, 2020

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$100,000 in sales or 200 transactions, prior to August 1, 2023

Maine economic nexus threshold: $100,000 in sales only

Included transactions:

Gross sales of tangible personal property delivered into the state
Taxable services delivered into the state
Exempt sales

Excluded transactions:

Exempt services
Sales made through a registered marketplace facilitator

Effective date:

July 1, 2018

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$100,000 in sales or 200 transactions, prior to January 1, 2022

Maryland economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross revenue from sales of tangible personal property delivered into the state
Sales of software delivered into the state
Digital goods delivered into the state
Exempt sales of tangible personal property
Exempt sales of software
Exempt sales of digital goods
Taxable services
Sales made through a registered marketplace facilitator

Excluded transactions:

Exempt services

Effective date:

October 1, 2018

Evaluation period:

Current or previous calendar year

Massachusetts economic nexus threshold: $100,000 in sales only

Included transactions:

Sales of tangible personal property delivered into the commonwealth
Services (taxable and exempt) rendered in the commonwealth
Exempt sales

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

October 1, 2019

Evaluation period:

Current or previous calendar year

Michigan economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Sales of tangible personal property delivered into the state
Services (taxable and exempt) rendered in the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

September 30, 2018

Evaluation period:

Previous calendar year

Minnesota economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Retail sales made into the state from outside the state
Taxable services
Exempt sales
Sales to tax-exempt entities
Sales made through a registered marketplace facilitator

Excluded transactions:

Sales for resale
Exempt services
Taxable resales

Effective date:

October 1, 2019

Evaluation period:

Threshold applies to the prior 12-month period

Previous threshold rules:

10 or more sales totaling $100,000 or 100 transactions, prior to October 1, 2019

Mississippi economic nexus threshold: $250,000 in sales only

Included transactions:

Total sales made into the state by remote sellers that purposefully or systematically exploit the market in the state
Services (taxable and exempt)
Exempt sales

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

September 1, 2018

Evaluation period:

Threshold applies to all transactions for the prior 12 months

Missouri economic nexus threshold: $100,000 in sales only

Included transactions:

Gross receipts from taxable sales of tangible personal property delivered into the state
Sales of tangible personal property made through a registered marketplace facilitator

Excluded transactions:

Exempt sales
Services (taxable and exempt)
Sales for resale
Returned sales

Effective date:

January 1, 2023

Evaluation period:

Preceding 12-month period, determined each calendar quarter

Nebraska economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Total retail sales made to customers in the state
Exempt sales
Services (taxable and exempt)
Sales made through a registered marketplace facilitator

Excluded transactions:

Sales for resale, sublease, or subrent

Effective date:

April 1, 2019

Evaluation period:

Current or previous calendar year

Nevada economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross revenue from retail sales of tangible personal property into the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

Sales for resale
Services (taxable and exempt)

Effective date:

October 1, 2018

Evaluation period:

Current or previous calendar year

New Jersey economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross revenue from retail sales of tangible personal property into the state
Specified digital products
Taxable services (listed in N.J.S.A. 54:32B-3(b)) delivered into the state, even if exempt
Nontaxable retail sales of tangible personal property
Sales made through a registered marketplace facilitator

Excluded transactions:

Exempt services

Effective date:

November 1, 2018

Evaluation period:

Current or previous calendar year

New Mexico economic nexus threshold: $100,000 in sales only

Included transactions:

Total taxable gross receipts from sales, leases, and licenses of tangible personal property
Sales from licenses and services for use of real property
Digital products and SaaS
Sales made through a registered marketplace facilitator

Excluded transactions:

Exempt sales
Exempt services

Effective date:

July 1, 2019

Evaluation period:

Previous calendar year

New York economic nexus threshold: $500,000 and 100 transactions

Included transactions:

Cumulative total gross receipts from sales of tangible personal property delivered into the state
Software as a service (SaaS) counts as tangible personal property
Nontaxable retail sales of tangible personal property
Sales made through a registered marketplace facilitator

Excluded transactions:

Services (taxable and exempt)

Effective date:

June 21, 2018

Evaluation period:

Immediately preceding four sales tax quarters

North Carolina economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross sales sourced to the state
Sum total sales price of tangible personal property
Sum total sales price of digital property
Sum total sales price of services
Exempt sales
Exempt services
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

November 1, 2018

Evaluation period:

Current or previous calendar year

North Dakota economic nexus threshold: $100,000 in sales only

Included transactions:

Gross taxable sales of tangible personal property and other items into the state
Gross taxable sales of services into the state

Excluded transactions:

Exempt sales
Exempt services
Sales made through a registered marketplace facilitator

Effective date:

October 1, 2018

Evaluation period:

Current or previous calendar year

Previous threshold rules:

Sales or transactions included prior to July 1, 2019
$100,000 in sales or 200 transactions prior to January 1, 2019

Ohio economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross receipts from sales of tangible personal property for storage, use, or consumption in the state
Enumerated services, the benefit of which is realized in the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

Sales for resale
Exempt services

Effective date:

August 1, 2019

Evaluation period:

Current or previous calendar year

Oklahoma economic nexus threshold: $100,000 in sales only

Included transactions:

Aggregate sales of taxable tangible personal property
Taxable services

Excluded transactions:

Exempt sales
Exempt services
Sales made through a registered marketplace facilitator

Effective date:

August 1, 2019

Evaluation period:

Current or previous calendar year

Previous threshold rules:

Taxable and exempt services excluded from threshold prior to November 1, 2023

Pennsylvania economic nexus threshold: $100,000 in sales only

Included transactions:

Gross sales of products and services in the commonwealth
Sales by agents, representatives, or subsidiaries in the commonwealth
Exempt sales
Exempt services
Sales made through a marketplace facilitator that does not collect sales tax on behalf of a remote seller

Excluded transactions:

Sales made through a registered marketplace facilitator that collects sales tax on behalf of a remote seller

Effective date:

July 1, 2019

Evaluation period:

Current or previous calendar year

Puerto Rico economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Total gross sales delivered into the territory
Exempt sales
Services (taxable and exempt)

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

January 1, 2021

Evaluation period:

Seller’s accounting year

Rhode Island economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross revenue from sales of tangible personal property
Prewritten computer software delivered electronically
Load and leave, vendor-hosted prewritten computer software
Specified digital products
Taxable services delivered into the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

Exempt services

Effective date:

July 1, 2019

Evaluation period:

Previous calendar year

South Carolina economic nexus threshold: $100,000 in sales only

Included transactions:

Gross revenue from sales of tangible personal property
Electronically transferred products
Services (taxable and exempt) rendered in the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

November 1, 2018

Evaluation period:

Previous or current calendar year

South Dakota economic nexus threshold: $100,000 in sales only

Included transactions:

Gross revenue from sales of tangible personal property
Electronically transferred products
Services (taxable and exempt) rendered in the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

November 1, 2018

Evaluation period:

Previous or current calendar year

Previous threshold rules:

$100,000 in sales or 200 transactions prior to July 1, 2023

Tennessee economic nexus threshold: $100,000 in sales only

Included transactions:

Sales to customers in the state
Exempt sales
Services (taxable and exempt)

Excluded transactions:

Sales made through a registered marketplace facilitator
Sales for resale

Effective date:

July 1, 2019

Evaluation period:

Previous 12-month period

Previous threshold rules:

$500,000 in sales only prior to October 1, 2020
Marketplace sales included prior to October 1, 2020

Texas economic nexus threshold: $500,000 in sales only

Included transactions:

Gross revenue from sales of tangible personal property and services into the state
Exempt sales
Exempt services
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

July 1, 2019

Evaluation period:

Previous 12-month period

Utah economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross revenue from sales of tangible personal property and services into the state
Any product transferred electronically into the state
Services (taxable and exempt) rendered in the state
Exempt sales

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

January 1, 2019

Evaluation period:

Current or previous calendar year

Vermont economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Sales of tangible personal property and services into the state
Products transferred electronically
Services (taxable and exempt) in the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Note: Businesses that only sell tax-exempt items into Vermont are not required to register for sales tax

Effective date:

July 1, 2018

Evaluation period:

Previous 12-month period

Virginia economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Sales of tangible personal property
Products transferred electronically
Taxable services
Exempt sales

Excluded transactions:

Sales for resale
Exempt services
Sales made through a registered marketplace facilitator

Effective date:

July 1, 2019

Evaluation period:

Current or previous calendar year

Washington economic nexus threshold: $100,000 in sales only

Included transactions:

Cumulative gross annual income
Exempt sales
Services (taxable and exempt)
Sales for resale
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

October 1, 2018

Evaluation period:

Current or previous calendar year

Previous threshold rules:

Cumulative gross receipts from retail sales and taxable services into the state prior to December 31, 2019
Cumulative gross annual income as of January 1, 2020
Resales included as of January 1, 2020

Washington, D.C., economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross receipts from retail sales delivered into the district
Exempt sales
Taxable services
Sales made through a registered marketplace facilitator

Excluded transactions:

Exempt services
Sales for resale

Effective date:

January 1, 2019

Evaluation period:

Current or previous calendar year

West Virginia economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Gross sales of tangible personal property and services into the state
Exempt sales
Exempt services
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Effective date:

January 1, 2019

Evaluation period:

Current or previous calendar year

Wisconsin economic nexus threshold: $100,000 in sales only

Included transactions:

Annual gross sales of tangible personal property into the state
Annual gross sales of services (taxable and exempt) into the state
Exempt sales
Sales made through a registered marketplace facilitator

Excluded transactions:

None

Note: Businesses that make only nontaxable sales into Wisconsin are not required to register for sales tax

Effective date:

October 1, 2018

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$100,000 in sales or 200 transactions prior to February 20, 2021

Wyoming economic nexus threshold: $100,000 or 200 transactions

Included transactions:

Annual gross sales of tangible personal property into the state
Annual gross sales of services (taxable and exempt) into the state
Annual gross sales of admission into the state
Taxable, exempt, and wholesale sales
Exempt sales

Excluded transactions:

Sales made through a registered marketplace facilitator

Effective date:

February 1, 2019

Evaluation period:

Current or previous calendar year

Previous threshold rules:

$100,000 in sales or 200 transactions prior to July 1, 2024
$100,000 in sales only as of July 1, 2024

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