State-by-state guide to economic nexus laws
Guide sections
On June 21, 2018, the Supreme Court of the United States ruled in favor of the state in South Dakota v. Wayfair, Inc. This ruling allows the state to begin taxing remote sales via their economic nexus laws. Since the ruling, more than 40 states enacted economic nexus laws of their own.
Economic nexus laws by state
as of February 28, 2020
Prior to this ruling, states could only enforce a tax collection obligation on businesses that had a physical presence in the state, such as a brick-and-mortar location or remote employees. While the physical presence standard still exists, nexus laws were expanded to include a sales tax obligation based on a certain level of economic activity within the state, including sales revenue, transaction volume, or a combination of both. Like many sales tax laws, economic nexus criteria vary by state and by the type of tax.
Below we’ll explore which states currently enforce economic nexus laws and some of the variations in each state’s law. For more information or assistance in determining your sales tax registration, collection, and remittance requirements, contact Avalara Professional Services.
Although we hope you’ll find the information helpful, this guide does not offer a substitute for professional legal or tax advice. If you have questions about your tax liability or concerns about compliance, please consult your qualified legal, tax, or accounting professional. This information was compiled in May 2019. Because states constantly update and amend their sales and use tax laws, see each state’s tax authority website for the most up-to-date and comprehensive information.
Alabama
Enforcement date: October 1, 2019
Included transactions:
Retail sales of tangible personal property delivered into the state.
Treatment of exempt transactions:
Exempt sales (except wholesale sales) are included in the threshold. Exempt services are not included.
Trigger:
Sales
Sales/transactions threshold: $250,000
Evaluation period:
Threshold applies to sales from the previous calendar year
Additional information:
Registration requirements: Alabama hasn’t specified how soon a remote business must register once it crosses the economic nexus threshold.
Alabama sales and use tax guidance
Simplified sellers use tax FAQs
Arizona
Enforcement date: October 1, 2019
Included transactions:
Gross proceeds of sales of tangible personal property or gross income derived from business in the state (excluding marketplace sales). Taxable services are included in the threshold.
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $200,000 (2019), $150,000 (2020), $100,000 (2021 forward)
Evaluation period:
Threshold applies to sales from the previous or current calendar year
Additional information:
Registration requirements: A remote business must register in Arizona by the first day of the month that starts at least 30 days after it crosses economic nexus threshold.
TPT law for remote sellers and marketplace facilitators
HB 2757
Arkansas
Enforcement date: July 1, 2019
Included transactions:
Sales of taxable tangible personal property, taxable services, digital codes, or specified digital products subject to Arkansas sales or use tax delivered into the state.
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to sales from the current or previous calendar year
Additional Information:
Registration requirements: Arkansas hasn’t specified how soon a remote business must register once it crosses the economic nexus threshold. It could be as early as the next transaction.
California
Enforcement date: April 1, 2019
Included transactions:
Retail sales of tangible personal property delivered into the state by the retailer and all persons related to the retailer. Taxable services are not included in the threshold.
Treatment of exempt transactions:
Exempt sales, including sales for resale, are included but exempt services are not included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $500,000
Evaluation period:
Threshold applies to sales in the preceding or current calendar year
Additional information:
California businesses meeting the economic nexus threshold in the state are required to collect all district (local) taxes starting April 25, 2019.
Registration requirements: California requires remote businesses to register and begin collecting sales tax on the day they cross the economic nexus threshold. See CDTFA FAQs for more details.
Colorado
Enforcement date: June 1, 2019
Included transactions:
Retail sales or taxable services delivered into the state are included in the threshold
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold, except wholesales
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Out-of-state sellers required to collect also need to collect and remit applicable local and special district sales taxes that are state-collected. Sellers that make sales in home rule cities where the state doesn’t collect sales tax should contact the cities directly to learn about their requirements.
In-state sellers that don't meet the economic nexus threshold in the state should source sales based on their location. Colorado businesses that do meet the economic threshold are required to use destination sourcing for all sales within 90 days of meeting the threshold.
Registration requirements: Colorado requires a remote business to register and collect Colorado sales tax by the first day of the first month commencing at least 90 days after crossing the threshold. See the Sales Tax Guide for more details (page 11).
Connecticut
Enforcement date: December 1, 2018; amended as of July 1, 2019
Included transactions:
Out-of-state sellers making retail sales from outside the state to a destination within the state, while not maintaining a place of business in the state, that regularly or systematically solicit the sale of tangible personal property in the state. Taxable services are not included. As of July 1, 2019, taxable services are included in the sales and transaction threshold, and the regular or systematic solicitation component is eliminated.
Treatment of exempt transactions:
Exempt sales are included but exempt services are not included in the threshold. As of July 1, 2019, both exempt sales and exempt services are included in the sales threshold but not the transaction threshold.
Trigger:
Sales and transaction volume
Sales/transactions threshold: Gross receipts of $250,000 and 200 retail transactions. As of July 1, 2019, the threshold changes to gross receipts of $100,000 and 200 retail transactions
Evaluation period:
Threshold applies to all transactions within the 12-month period ending on September 30th immediately preceding the monthly or quarterly period during which liability is established
Additional information:
Registration requirements: Connecticut hasn’t specified how soon a remote business must register once it crosses the economic nexus threshold.
Georgia
Enforcement date: January 1, 2019
Included transactions:
Retail sales of tangible personal property delivered electronically or physically to a location in the state for consumption, use, or storage in the state. Taxable services are not included in the threshold.
Treatment of exempt transactions:
Exempt sales, except resales, are included but exempt services are not included in the threshold
Trigger:
Sales or transaction volume.
Sales/transactions threshold: $250,000 or 200 transactions. As of January 1, 2020, the threshold changes to $100,000 or 200 transactions.
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
As of April 28, 2019, remote sellers that meet the economic nexus threshold in Georgia must collect and remit sales tax.They can no longer opt out by complying with non-collecting seller use tax reporting requirements.
Registration requirements: Georgia hasn’t specified how soon a remote business must register once it crosses the economic nexus threshold. It could be as early as the next transaction.
Hawaii
Enforcement date: July 1, 2018
Included transactions:
Gross income or gross proceeds of tangible personal property, intangible property, or services delivered or consumed in the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the current or immediately preceding calendar year. Applies to taxable years beginning on January 1, 2018.
Additional information:
Registration requirements: Hawaii requires a remote business to file its first periodic return by the deadline for the periodic return following the period in which it crossed the economic nexus threshold. See the Department of Taxation Announcement 18-10 for more details.
Idaho
Enforcement date: June 1, 2019
Included transactions:
Cumulative gross receipts from sales including taxable products and taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger: Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the current or preceding calendar year
Additional information:
Remote sellers with economic nexus are not responsible for collecting or remitting local sales tax in Idaho.
Registration requirements: Idaho requires remote businesses to track their sales and register before reaching the threshold, so they’ll have their seller’s permit in time to begin collecting sales tax as soon as they cross the economic nexus threshold.
Illinois
Enforcement date: October 1, 2018
Included transactions:
Sales of tangible personal property and property sold incident to a service into the state, excluding occasional sales; taxable services are not included
Treatment of exempt transactions:
Exempt sales, including exempt sales of property sold incident to a service, are included; sales for resale are not included; exempt services are not included in the threshold
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Although the threshold applies to the preceding 12 months, it must be determined on a quarterly basis. Additional exclusions exist for property that must be registered with the state.
Additional information:
Registration requirements: A remote business must determine, on a quarterly basis, whether it crossed the economic nexus threshold in Illinois during the immediately preceding 12-month period. If it has, it must register and start collecting sales and use tax by the first day of the next quarter. See FY 2019-05 for more details.
Indiana
Effective date: October 1, 2018
Included transactions:
Sales of tangible personal property, electronically delivered products, and taxable services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to transactions in the previous or current calendar year
Additional information:
Registration requirements: Indiana requires remote businesses to register to collect and remit sales tax “immediately upon reaching the threshold.” See Remote Seller Information for more details.
Iowa
Enforcement date: January 1, 2019
Included transactions:
Sales of tangible personal property, electronically delivered products, and services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transaction volume. As of July 1, 2019, the trigger is sales only.
Sales/transactions threshold: $100,000 or 200 transactions. As of July 1, 2019, the transactions threshold is eliminated.
Evaluation period:
Threshold applies to transactions for an immediately preceding or current calendar year
Additional information:
Registration requirements: Iowa requires remote businesses to register to collect and remit sales tax “on the first day of the next calendar month that starts at least 30 days from the day the remote seller first exceeded” the threshold. See Remote Sellers for more details.
Kansas
Enforcement date: October 1, 2019, according to the Kansas Department of Revenue. However, the Kansas Attorney General determined the Kansas Department of Revenue lacks the authority to tax remote sales without providing safe harbor for small sellers. The Kansas Department of Revenue disagrees, saying it cannot select the laws it enforces. What all this means for remote retailers is uncertain at this time.
Included transactions:
The rule applies to all remote sellers who make sales into Kansas
Treatment of exempt transactions:
Awaiting further clarification on the treatment of exempt sales and services
Trigger:
N/A; there is no small seller exception
Sales/transactions threshold: N/A; there is no small seller exception
Evaluation period:
N/A; there is no small seller exception
Additional information:
Registration requirements: The Kansas Department of Revenue requires any remote business making sales into the state to register to collect and remit sales tax. See Notice 19-04 for more details.
Sales tax requirements for retailers doing business in Kansas
Kentucky
Enforcement date: October 1, 2018
Included transactions:
Sales of tangible personal property or digital property delivered or transferred electronically into the commonwealth. Taxable services are not included in the threshold.
Treatment of exempt transactions:
Exempt sales are included, but exempt services are not included in the threshold
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to sales in the previous or current calendar year
Additional information:
Registration requirements: Kentucky requires a remote business to register to collect and remit sales tax on the first day of the calendar month that begins no later than 30 days after crossing the economic nexus threshold. See Ky. Rev. Stat. Ann. §139.340(2)(g)(2) for more details.
Kentucky sales and use tax collections by remote retailers
HB487
Louisiana
Enforcement date: No later than July 1, 2020
Included transactions:
Sales of products, electronically transferred products, or taxable services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Registration requirements: Louisiana requires a remote business to register to collect and remit sales and use tax within 30 days of surpassing the economic nexus threshold. See Information Bulletin No 18-002 for more details.
Maine
Enforcement date: July 1, 2018
Included transactions:
Gross sales of tangible personal property* and taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales are included in the threshold; exempt services are not included in the threshold
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to sales during the current or previous calendar year
Additional information:
Registration requirements: Maine may require a remote business to register to collect and remit sales and use tax as soon as it crosses the economic nexus threshold.
Maine guidance for remote sellers
*Tangible personal property includes electronically transferred property
Maryland
Enforcement date: October 1, 2018
Included transactions:
Sales of tangible personal property or taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales are included but exempt services are not included in the threshold
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to sales during the current or previous calendar year
Additional information:
Registration requirements: Maryland hasn’t specified how soon a remote business must register once it crosses the economic nexus threshold.
Massachusetts
Enforcement date: October 1, 2019
Included transactions:
Taxable sales of tangible personal property and services
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the prior or current taxable year
Additional information:
The Department of Revenue has repealed the cookie nexus rule.
Registration requirements: Massachusetts requires a remote vendor to register to collect and remit sales tax by the first day of the first month beginning two months after the month in which the threshold was crossed. Different rules may apply to businesses who crossed the threshold in 2019. See 830 CMR 64H.1.9 for more details.
Michigan
Enforcement date: After September 30, 2018
Included transactions:
Sales of tangible personal property or taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the previous calendar year
Additional information:
Registration requirements: Michigan requires a remote business to register to collect and remit sales tax by the start of the calendar year after the threshold was crossed.
Minnesota
Enforcement date: October 1, 2018, amended as of October 1, 2019
Included transactions:
Applies to retail sales made into the state from outside the state. Taxable services are included in the threshold.
Treatment of exempt transactions:
Exempt sales and sales to tax-exempt entites are included in the threshold, but sales for resale are not. Exempt services are not included in the threshold.
Trigger:
Sales or transaction volume
Sales/transactions threshold: 10 or more sales totaling $100,000 or 100 retail sales. As of October 1, 2019, the threshold changes to $100,000 or 200 or more retail sales.
Evaluation period:
Threshold applies to the prior 12-month period
Additional information:
Registration requirements: Minnesota requires a remote business to register to collect and remit Minnesota sales tax on the first taxable retail sale into Minnesota occurring no later than 60 days after the threshold has been crossed. See Remote Seller FAQs for more details.
Mississippi
Enforcement date: September 1, 2018
Included transactions:
Sales of tangible personal property into the state by remote sellers that purposefully or systematically exploit the market in the state and have a substantial economic presence. Taxable services are included in the threshold.
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $250,000
Evaluation period:
Threshold applies to all transactions for the prior 12 months
Additional infomation:
Registration requirements: Mississippi hasn’t specified how soon a remote business must register once it crosses the economic nexus threshold. It could be as early as the next transaction.
Nebraska
Enforcement date: April 1, 2019 (pushed back from January 1, 2019 by GIL-1-19-2)
Included transactions:
Retail sales of tangible personal property into the state. Awaiting further clarification on the treatment of taxable services.
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold, except resales
Trigger:
Sales or transaction volume
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the previous or current calendar year.
Additional information:
Registration requirements: Nebraska requires a remote business to register to collect and remit Nebraska sales tax on or before the first day of the second calendar month after the threshold is exceeded. See FAQs for remote sellers for more details.
Nevada
Enforcement date: October 1, 2018
Included transactions:
Retail sales of tangible personal property into the state, excluding sales for resale. Taxable services are not included in the threshold.
Treatment of exempt transactions:
Exempt sales (except sales for resale) are included in the threshold; exempt services are not included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the proceeding or current calendar year
Additional information:
Registration requirements: Nevada requires a remote business to register to collect and remit Nevada sales tax starting on the first day of the first calendar month that begins at least 30 calendar days after it crosses the economic nexus threshold. See LCB File No. R014-201 for more details.
New Jersey
Enforcement date: November 1, 2018
Included transactions:
Gross revenue of tangible personal property, specified digital products, or taxable services (enumerated services under N.J.S.A. 54:32B-3(b)) delivered into the state, excluding sales for resale
Treatment of exempt transactions:
Exempt sales — excluding sales for resale — are included in the threshold. Any and all receipts from services enumerated and taxable under N.J.S.A. 54:32B-3(b) and delivered into New Jersey should be included in the threshold calculation even if a service is exempt under the specific circumstances of the transaction.
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the current or prior calendar year
Additional information:
Registration requirements: New Jersey requires a remote business to register to collect and remit New Jersey sales tax within 30 calendar days after crossing the economic nexus threshold. See Remote Sellers FAQs for more details.
New Mexico
Enforcement date: July 1, 2019
Included transactions:
Taxable gross receipts from taxable sales, taxable services, leases, and licenses of products, as well as sales of licenses and services of licenses for use of real property sourced to the state
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the previous calendar year
Additional information:
New Mexico businesses meeting the economic nexus threshold in the state are required to collect city and county GRT starting July 1, 2021.
Registration requirements: New Mexico requires a remote business to register for New Mexico gross receipts tax by January 1 of the year following the year it crossed the economic nexus threshold.
New York
Enforcement date: Effective “immediately after the Wayfair ruling, June 21, 2018”; however, no clearly stated effective date is currently provided
Included transactions:
Gross sales of tangible personal property delivered into the state, but taxable services are not included in the threshold
Treatment of exempt transactions:
Exempt sales are included in the threshold count but exempt services are not
Trigger:
Sales and transaction volume
Sales/transactions threshold: $500,000 and 100 transactions
Evaluation period:
Threshold applies to the previous four sales tax quarters as defined by the state
Additional information:
Registration requirements: New York requires a remote business to register to collect and remit New York sales tax within 30 days after crossing the economic nexus threshold and begin to collect tax 20 days thereafter. See Nexus FAQs for more details.
North Carolina
Enforcement date: November 1, 2018
Included transactions:
Gross sales of products, including tangible personal property, digital property, and
taxable services sourced to the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Registration requirements: North Carolina requires a remote business to register to collect and remit North Carolina sales tax within 60 days of crossing the economic nexus threshold. See Remote Sales for more details.
North Dakota
Enforcement date: October 1, 2018; threshold amended as of January 1, 2019
Included transactions:
Gross retail sales from the sale of tangible personal property and taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold
Trigger:
Sales or transactions; as of January 1, 2019, the threshold applies to sales only
Sales/transactions threshold: $100,000 or 200 transactions; as of January 1, 2019, $100,000 only
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
A seller that exceeds the sales threshold must begin to collect sales tax on sales delivered during the following calendar year or 60 days after the threshold is met, whichever is earlier.
Registration requirements: North Dakota requires remote businesses to register to collect and remit North Dakota sales tax the earlier of the following calendar year or 60 days after crossing the teconomic nexus hreshold.
Ohio
Enforcement date: August 1, 2019
Included transactions:
Gross receipts from the sale of tangible personal property for storage, use, or consumption in the state or from providing services the benefit of which is realized in the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the current or preceding calendar year
Additional information:
The new law repeals the previous cookie nexus law that applied only to software or network providers.
Ohio’s new law retains a provision that excludes small remote sellers – defined as a remote seller whose gross annual receipts from remote sales in the United States (including affiliate sales) don’t exceed $1 million for the preceding calendar year. See Ohio Rev. Code Ann. §§ 5741.01(S) and 5741.17(c) for more details.
Registration requirements: Ohio requires remote businesses to register and begin collecting Ohio sales tax the day after crossing the economic nexus threshold. See Out-of-state Sellers for more details.
Oklahoma
Enforcement date: November 1, 2019
Included transactions:
Aggregate sales of tangible personal property delivered to locations within the state. Taxable services are not included in the threshold.
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Registration requirements: Oklahoma requires a remote business to register and collect and remit sales tax by the first calendar month succeeding the month it crosses the economic nexus threshold. See SB 513 for more details.
Pennsylvania
Enforcement date: July 1, 2019
Included transactions:
Gross sales of products and services in the commonwealth
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to sales in the prior 12 months
Additional information:
The threshold did not include exempt sales or services through June 30, 2019, under a different remote seller sales tax requirement.
Registration requirements: If total Pennsylvania sales for 2019 exceed the threshold, a remote seller must collect and remit PA sales tax for taxable starting April 1, 2020. The first quarter of each year is set aside for businesses to tabulate their total Pennsylvania sales from the previous calendar year in order to determine their sales tax exposure. See Answers to Economic Nexus for more details.
Rhode Island
Enforcement date: July 1, 2019
Included transactions:
Gross revenue from sales of tangible personal property, prewritten computer software delivered electronically or by load and leave, vendor-hosted prewritten computer software, specified digital products, and/or taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales are included but exempt services are not included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the preceding calendar year
Additional information:
Registration requirements: Rhode Island requires a remote business to register and collect and remit sales tax on January 1 of the year following the calendar year they crossed the economic nexus threshold. Different requirements apply if the threshold was passed in 2018. See ADV_2019_11 for more details.
South Carolina
Enforcement date: November 1, 2018
Included transactions:
Gross revenue from sales of all products, electronically transferred products, or taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Registration requirements: Remote businesses that cross the economic nexus threshold on or after October 1, 2018, are responsible for remitting the sales and use tax for all taxable sales made into South Carolina beginning the first day of the second calendar month after economic nexus is established. See SC Revenue Ruling #18-14 for more details.
South Dakota
Enforcement date: November 1, 2018
Included transactions:
Gross revenue from sales of tangible personal property, electronically delivered products, or services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Registration requirements: South Dakota requires remote businesses to register and collect and remit South Dakota sales tax from the moment they cross the economic nexus threshold forward. See Remote Seller Bulletin for more details.
Tennessee
Enforcement date: July 1, 2019
Included transactions:
Out-of-state retailers must register to report and pay tax on all taxable and exempt sales and services — except for resale — into the state
Treatment of exempt transactions:
Exempt sales and exempt services — except sales for resale — are included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $500,000
Evaluation period:
Threshold applies to the previous 12-month period
Additional information:
Registration requirements: Tennessee requires remote businesses to register and begin collecting and remitting Tennessee sales and use tax by the first day of the third calendar month following the month they cross the economic nexus threshold. See 1320-05-01-.129(2)(b) for more details.
Texas
Enforcement date: October 1, 2019
Included transactions:
Gross revenue from sales of products and taxable services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales only
Sales/transactions threshold: $500,000
Evaluation period:
Threshold applies to the previous 12 months, with the initial 12 calendar months beginning July 1, 2018 through June 30, 2019
Additional information:
Registration requirements: A remote business must register with the Texas Comptroller no later than the first day of the fourth month after the month it crossed the economic nexus threshold. More details. See 34 Texas Administrative Code §3.286 for more details.
Utah
Enforcement date: January 1, 2019
Included transactions:
Gross revenue from the sales of tangible personal property, any product transferred electronically, or taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Registration requirements: Utah hasn’t specified how soon a remote business must register once it crosses the economic nexus threshold. It could be as early as the next transaction.
Vermont
Enforcement date: July 1, 2018
Included transactions:
Taxable and nontaxable sales of tangible personal property as a result of regular, systematic, or seasonal solicitation from outside the state to a destination within the state while not maintaining a place of business or other physical presence in the state. Taxable services are included in the threshold.
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold. However, businesses that only sell tax-exempt items into Vermont aren’t required to register for a sales tax account.
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the preceding 12-month period and should be reevaluated quarterly
Additional information:
Registration requirements: A remote business must register to collect and remit Vermont sales tax within 30 days after crossing the economic nexus threshold. Sellers must determine whether the threshold has been met in Vermont at the end of each quarter. See Wayfair FAQs for more details.
Virginia
Enforcement date: July 1, 2019
Included transactions:
Gross revenue from retail sales and taxable services into the commonwealth, including sales made by members of same controlled group of corporations
Treatment of exempt transactions:
Exempt sales (except resales) are included in the threshold but exempt services are excluded
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the current or previous calendar year
Additional information:
Registration requirements: A remote business must register to collect and remit Virginia sales tax no later than 30 days after crossing the economic nexus threshold. See Guidelines for Remote Sellers and Marketplace Facilitators for more details.
Washington
Enforcement date: October 1, 2018 (Requirements for thresholds were updated as of March 14, 2019)
Included transactions:
Cumulative gross receipts from retail sales and taxable services into the state through December 31, 2019. Cumulative gross income in Washington from January 1, 2020, forward.
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold, except resales
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Until July 1, 2019, remote sellers with between $10,000 and $100,000 in sales in the state and fewer than 200 transaction have a choice: Collect and remit sales tax or comply with use tax reporting requirements for non-collecting sellers. Effective July 1, 2019, the non-collecting seller use tax reporting option is eliminated.
Washington also enforces economic nexus for its business and occupation (B&O) tax on gross receipts.
Registration requirements: A remote business must register to collect and remit Washington sales tax on the first day of the month that starts at least 30 days after crossing the threshold. See Registration requirements for out-of-state businesses for more details.
Washington, D.C.
Enforcement date: January 1, 2019
Included transactions:
Retail sales of tangible personal property, digital goods, and taxable services delivered into the district
Treatment of exempt transactions:
With the exception of sales for resale, exempt sales and exempt services are included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to sales in the previous or current calendar year
Additional information:
Registration requirements: A remote business must register and start collecting sales tax in the District of Columbia “as soon as its sales into the District exceed” the economic nexus threshold. See the OTR FAQs (#4) for more details.
West Virginia
Enforcement date: January 1, 2019
Included transactions:
Gross sales of tangible personal property and taxable services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the preceding or current calendar year
Additional information:
Registration requirements: A remote business must register and begin collecting West Virginia sales and use taxes on sales made after the date the economic nexus threshold was crossed. See Remote Sellers and West Virginia for more details.
Wisconsin
Enforcement date: October 1, 2018
Included transactions:
Annual gross sales of taxable products and taxable services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold; businesses that only make nontaxable sales in Wisconsin are not required to register for a sales tax account
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Previous and current calendar year (based on remote seller's taxable year for federal income tax purposes)
Additional information:
Registration requirements: A remote business is required to register and begin collecting Wisconsin sales tax upon crossing the economic nexus threshold. See Registration and Collection Dates for Remote Sellers for more details.
Wyoming
Enforcement date: February 1, 2019
Included transactions:
Sales of taxable and wholesale tangible personal property, admissions, or taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold count
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the current or immediately preceding calendar year
Additional information:
Registration requirements: A remote business could be required to register and begin collecting Wyoming sales tax as soon as it crosses the economic nexus threshold.
Stay ahead of changing sales tax legislation
As you can see, economic nexus laws can vary quite a bit from state to state, so it’s important for businesses to understand the laws in full and review sales activity frequently to determine when and where they have a new obligation. As your business grows, ensure you have a partner like Avalara in place to help you scale.
Economic nexus is one of the many ways your business can establish nexus: an obligation to register, collect, and remit sales tax in a jurisdiction. To see other sales tax laws and nexus rules by state, view our sales tax laws by state resource.
If you’ve determined you have a new sales tax obligation due to economic nexus laws, the typical next step is to register your business with the jurisdiction. Avalara Licensing can help with that.