Economic Nexus: Find out where you're on the hook to collect and file sales tax
Out-of-state sales can trigger tax obligations known as economic nexus.
Avalara can help you track where you owe, register, and file.
Identify where and what triggers economic nexus
Economic nexus 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 economic nexus threshold in some states.
- You need to register in states where you have economic nexus.
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.
Who does economic nexus affect?
Economic nexus impacts businesses with no physical presence in a state, also known as remote sellers, who sell goods and services in that state that meet or exceed the state's economic nexus threshold.
Economic nexus thresholds
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.
Economic nexus details by state
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:
Current or previous calendar year
Included transactions:
Statewide gross sales of goods, property or products delivered into the state
Services rendered in the state
Sales through marketplaces
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
Varies by district
Evaluation period:
Current or previous calendar year
Included transactions:
Gross proceeds of sales of tangible personal property or services
Gross income derived from business in the state
Services rendered in the state
Exempt sales
Exempt services
Excluded transactions:
Sales through marketplaces
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
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
Effective date:
July 1, 2019
Evaluation period:
Current or previous calendar year
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 (i.e., sales for resale)
Excluded transactions:
Exempt services
Services
Effective date:
April 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Retail sales of tangible personal property delivered into the state
Commodities delivered into the state
Services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
Exempt wholesale
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
Included transactions:
Gross receipts from tangible personal property (including digital products and SaaS) sold into the state
Exempt sales in sales only
Exempt services in sales only
Excluded transactions:
- Services
- Sales for resale
- Sales through an online marketplace
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 only
Excluded transactions:
- Sales for resale in transaction only
Exempt services
Taxable services
Digital products and SaaS
Included transactions:
Taxable sales of tangible personal property delivered physically into the state
Excluded transactions:
Exempt sales
Exempt services
Taxable services
Effective date:
July 1, 2021
Evaluation period:
Current or previous calendar year
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:
Taxable services
Exempt services
Exempt resales
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
Included transactions:
Gross income or gross proceeds of tangible personal property delivered in the state
Intangible property delivered in the state
Services delivered or consumed in the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
July 1, 2018
Evaluation period:
Current or previous calendar year. Applies to taxable years beginning on January 1, 2018.
Included transactions:
Cumulative gross receipts from sales including taxable products and taxable services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
June 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Cumulative gross receipts from sales
Exempt sales
Excluded transactions:
Occasional sales
Sales for resale
Services
Sales made through a 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
Included transactions:
Gross revenue from sales of tangible personal property
Electronically delivered products into the state
Electronically delivered services into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
October 1, 2018
Evaluation period:
Current or previous calendar year
Included transactions:
Gross revenue from sales of tangible personal property
Specified electronically delivered products
Electronically delivered services into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
January 1, 2019
Evaluation period:
Current or previous calendar year
Previous threshold rules:
Sales or transaction volume prior to July 1, 2019
$100,000 or 200 transactions prior to July 1, 2019
- Sales only as of July 1, 2019
Included transactions:
Cumulative gross receipt from sales by the retailer to customers in Kansas
Exempt sales
Exempt services
Digital products and SaaS
Excluded transactions:
None
Effective date:
July 1, 2021
Evaluation period:
Current or previous calendar year
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
Excluded transactions:
Exempt services
Taxable services
Effective date:
October 1, 2018
Evaluation period:
Current or previous calendar year
Included transactions:
Gross revenue from sales of products delivered into the state
Electronically transferred products
Services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
July 1, 2020
Evaluation period:
Current or previous calendar year
Included transactions:
Gross sales of tangible personal property delivered into the state
Taxable services delivered into the state
Exempt sales
Excluded transactions:
Exempt services
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
Sales only as of January 1, 2022
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
Excluded transactions:
Exempt services
Effective date:
October 1, 2018
Evaluation period:
Current or previous calendar year
Included transactions:
Sales of tangible personal property delivered into the commonwealth
Services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
October 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Sales of tangible personal property delivered into the state
Taxable services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
September 30, 2018
Evaluation period:
Previous calendar year
Included transactions:
Retail sales made into the state from outside the state
Taxable services
Exempt sales
Sales to tax-exempt entities
Excluded transactions:
Sales for resale
Exempt services
Taxable resale
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
Included transactions:
Total sales made into the state by remote sellers that purposefully or systematically exploit the market in the state
Services
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
September 1, 2018
Evaluation period:
Threshold applies to all transactions for the prior 12 months
Included transactions:
Gross receipts from taxable sales of tangible personal property delivered into the state
Excluded transactions:
Exempt sales
Effective date:
January 1, 2023
Evaluation period:
Current or previous calendar year, determined quarterly
Included transactions:
Total retail sales made to customers in the state
Exempt sales
Exempt services
Excluded transactions:
- Sales for resale, sublease, or subrent
Effective date:
April 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Gross revenue from retail sales of tangible personal property into the state
Exempt sales
Excluded transactions:
Sales for resale
Exempt services
Services
Effective date:
October 1, 2018
Evaluation period:
Current or previous calendar year
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
Nontaxable retail sales of tangible personal property
Receipts for taxable services (listed in N.J.S.A. 54:32B-3(b)) delivered into the state, even if it’s exempt
Excluded transactions:
- Exempt services
Effective date:
November 1, 2018
Evaluation period:
Current or previous calendar year
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
Excluded transactions:
Exempt sales
Exempt services
Effective date:
July 1, 2019
Evaluation period:
Previous calendar year
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
Excluded transactions:
Services
Effective date:
June 21, 2018
Evaluation period:
Immediately preceding four sales tax quarters
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
Excluded transactions:
None
Effective date:
November 1, 2018
Evaluation period:
Current or previous calendar year
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 marketplace
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
- $100,000 in sales only as of January 1, 2019
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
Excluded transactions:
Sales for resale
Exempt services
Effective date:
August 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Aggregate sales of taxable tangible personal property
Excluded transactions:
Exempt sales
Exempt services
Services
Effective date:
August 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Gross sales of products and services in the commonwealth
Sales by agents, representatives, or subsidiaries in the commonwealth
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
July 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Total gross sales delivered into the territory
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
January 1, 2021
Evaluation period:
Seller’s accounting year
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
Excluded transactions:
Exempt services
Effective date:
July 1, 2019
Evaluation period:
Previous calendar year
Included transactions:
Gross revenue from sales of tangible personal property
Electronically transferred products
Services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
November 1, 2018
Evaluation period:
Previous or current calendar year
Included transactions:
Gross revenue from sales of tangible personal property
Electronically transferred products
Services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
November 1, 2018
Evaluation period:
Previous or current calendar year
Included transactions:
Sales to customers in the state
Exempt sales
Exempt services
Excluded transactions:
Sales made through online marketplaces
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
$100,000 in sales only as of October 1, 2020
Included transactions:
Gross revenue from sales of tangible personal property and services into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
July 1, 2019
Evaluation period:
Previous 12-month period
Included transactions:
Gross revenue from sales of tangible personal property and services into the state
Any product transferred electronically into the state
Services delivered into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
January 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Sales of tangible personal property and services into the state
Products transferred electronically
Services in the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
July 1, 2018
Evaluation period:
Previous 12-month period
Included transactions:
Sales of tangible personal property
Products transferred electronically
Services
Exempt sales
Excluded transactions:
Sales for resale
Exempt services
Effective date:
July 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Cumulative gross annual income
Exempt sales
Exempt services
Sales for resale
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
Included transactions:
Gross receipts from all retail sales delivered into the District
Exempt sales
Excluded transactions:
None
Effective date:
January 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Gross sales of tangible personal property and services into the state
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
January 1, 2019
Evaluation period:
Current or previous calendar year
Included transactions:
Annual gross sales of tangible personal property into the state
Annual gross sales of services into the state
Exempt sales
Exempt services
Excluded transactions:
None
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
$100,000 in sales only as of February 20, 2021
Included transactions:
Annual gross sales of tangible personal property into the state
Annual gross sales of services into the state
Annual gross sales of admission into the state
Taxable, exempt, and wholesale sales
Exempt sales
Exempt services
Excluded transactions:
None
Effective date:
February 1, 2019
Evaluation period:
Current or previous calendar year
Wait, do you owe back taxes?
Let us sort things out for you in each state prior to registering.
What’s new in taxes? Find out now.
Learn about the impacts of inflation, the digitalization of global compliance, and more. Get the free Avalara Tax Changes 2023 report today.


What’s new in taxes? Find out now.
Learn about the impacts of inflation, the digitalization of global compliance, and more. Get the free Avalara Tax Changes 2023 report today.
Your next stages for automating compliance
Consider registering in the states where you’ve hit thresholds
Ready to collect and remit sales tax in new states? Avalara Sales Tax Registration can get you registered for $349 per location.
Automate your sales tax rate calculations
Avalara AvaTax collects sales and use tax using more accurate tax rates, helps track nexus, and integrates with your existing business systems.
File your sales and use tax returns
Avalara Returns for Small Business simplifies your sales tax return process and helps track nexus. See how Avalara can help you maintain compliance faster and easier starting at $19 a month.