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.
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.
Economic nexus laws by state
as of August 20, 2019
Alabama
Enforcement date: October 1, 2018
Included transactions:
Retail sales of tangible personal property delivered into the state. Taxable services are included in the threshold count.
Treatment of exempt transactions:
Exempt sales (except wholesale sales) and exempt services are included in the threshold count.
Trigger:
Sales
Sales/transactions threshold: $250,000
Evaluation period:
Threshold applies to sales from the previous calendar year
Additional information:
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 not included in the threshold count.
Treatment of exempt transactions:
Awaiting further clarification on the treatment of exempt sales but exempt services are not included in the threshold count
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:
TPT law for remote sellers and marketplace facilitators
HB 2757
Arkansas
Enforcement date: July 1, 2019
Included transactions:
Sales of 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 count
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:
Sales and use tax for remote sellers
SB576
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 count.
Treatment of exempt transactions:
Exempt sales, including sales for resale, are included but exempt services are not included in the threshold count
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
Use tax collection requirements
AB147
Colorado
Enforcement date: June 1, 2019
Included transactions:
Retail sales or taxable services delivered into the state are included in the threshold count
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold count
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.
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, but 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 count. As of July 1, 2019, exempt sales and exempt services are included in the sales threshold but not the transaction threshold.
Trigger:
Sales and transaction volume
Sales/transactions threshold: $250,000 and 200 transactions. As of July 1, 2019, the threshold changes to $100,000 and 200 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
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 count.
Treatment of exempt transactions:
Exempt sales are included but exempt services are not included in the threshold count
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:
Until April 28, 2019, remote sellers that meet the economic nexus threshold in Georgia had a choice: collect and remit sales tax or comply with use tax reporting requirements for non-collecting sellers. After April 28, 2019, remote sellers that meet the economic nexus threshold in Georgia have to collect and remit sales tax.
Remote Sellers - Sales and Use Tax Obligations
GA HB61
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 count
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:
Department of taxation announcement
HI SB2514
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 count
Trigger: Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the current or preceding calendar year
Additional information:
Online sellers information
HB 259
Illinois
Enforcement date: October 1, 2018
Included transactions:
Sales of tangible personal property and taxable services into the state, excluding sales for resale and occasional sales
Treatment of exempt transactions:
Exempt sales are included but exempt services are not included in the threshold count
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:
Guidance for remote sellers and retailers
Use tax guidance for remote sellers
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 count
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:
Remote sellers information
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 count
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:
Remote sellers information
SF2417
Kansas
Enforcement date: October 1, 2019
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:
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 count.
Treatment of exempt transactions:
Exempt sales are included, but exempt services are not included in the threshold count
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:
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 count
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:
Remote sellers bulletin
HB547
Maine
Enforcement date: July 1, 2018
Included transactions:
Gross revenue of tangible personal property, products transferred electronically, and taxable services delivered into the state
Treatment of exempt transactions:
Exempt sales and services are included in the threshold count
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:
Maine guidance for remote sellers
LD1405 SP483
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 count
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:
Regulation on out of state vendors
HB1301
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 count
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the prior or current taxable year
Additional information:
The enactment of economic nexus in Massachusetts doesn't repeal the cookie nexus rule previously established by the Department of Revenue
Remote vendors FAQs
Bill H.4000
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 count
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the previous calendar year
Additional information:
Information for remote sellers
RAB 2018-16
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 count.
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold count
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:
Remote seller FAQs
HF5
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 count
Trigger:
Sales only
Sales/transactions threshold: $250,000
Evaluation period:
Threshold applies to all transactions for the prior 12 months
Additional infomation:
Guidance for remote sellers
Nebraska
Enforcement date: January 1, 2019
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 count
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:
Notice for remote sellers and marketplace facilitators
LB284
Nevada
Enforcement date: October 1, 2018
Included transactions:
Sales into the state, excluding sales for resale. Taxable services are not included in the threshold count.
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold count
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:
Remote sellers FAQs
R189-18
New Jersey
Enforcement date: November 1, 2018
Included transactions:
Gross revenue of tangible personal property, specified digital products, or taxable services delivered into the state, excluding sales for resale
Treatment of exempt transactions:
Exempt sales — excluding sales for resale — are included in the threshold count. Awaiting further clarification on exempt services.
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:
Information for remote sellers
NJ A4496
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 count
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.
Changes to New Mexico tax law
HB6
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 count
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:
Remote seller requirements
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 count
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:
Information for remote sellers
SB56
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 count
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
Remote sellers FAQ
SB 2191
SB 2298
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 count
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:
HB166
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.
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 count.
Treatment of exempt transactions:
Awaiting further clarification on exempt sales but exempt services are not included in the threshold count
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Remote sellers FAQs
SB513
HB1019
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 count
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.
Sales and use tax bulletin
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 count
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies to the preceding calendar year
Additional information:
Remote sellers information
SB 251A and HB5278A
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 count
Trigger:
Sales only
Sales/transactions threshold: $100,000
Evaluation period:
Threshold applies to the previous or current calendar year
Additional information:
Sales and use tax for remote sellers
Remote sellers FAQs
South Dakota
Enforcement date: November 1, 2018
Included transactions:
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 count
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:
Remote sellers information
Tennessee
Enforcement date: July 1, 2019
Included transactions:
Out-of-state retailers must register to report and pay tax on all taxable sales and taxable services — except for resale — into the state
Treatment of exempt transactions:
Exempt sales — except sales for resale — are included in the threshold count and exempt services are awaiting further clarification
Trigger:
Sales only
Sales/transactions threshold: $500,000
Evaluation period:
Threshold applies to the previous 12-month period
Additional information:
Guidance for out-of-state dealers
HB0667
Texas
Enforcement date: October 1, 2019
Included transactions:
Sales of products and taxable services into the state
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold count
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:
Resources for sellers after Wayfair
HB 2153
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 count
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:
Remote sellers information
SB 2001
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 count.
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold count. 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:
South Dakota v. Wayfair
H.873
Virginia
Enforcement date: July 1, 2019
Included transactions:
Gross revenue from retail sales and taxable services into the commonwealth, including sals made by members of same controlled group of corporations
Treatment of exempt transactions:
Exempt sales and exempt services are not 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 previous calendar year
Additional information:
Information for remote sellers
SB1083
Washington
Enforcement date: October 1, 2018 (Requirements for thresholds were updated as of March 15, 2019)
Included transactions:
Cumulative gross receipts or annual gross retail sales and taxable services into the state are included in the threshold count
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold count
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. Washington also has a business and occupation (B&O) tax on gross receipts.
Remote sellers
Registration thresholds
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 are included in the threshold count
Treatment of exempt transactions:
Exempt sales and exempt services are not included in the threshold count
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:
OTR Notice 2019-02
B22-1070
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 count
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:
Remote sellers information
Tax department notice
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 count
Trigger:
Sales or transactions
Sales/transactions threshold: $100,000 or 200 transactions
Evaluation period:
Threshold applies annually to the seller's taxable year for federal income tax purposes
Additional information:
Remote sellers information
Wisconsin ACT 368
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:
Remote sellers information
HB 19
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 their sales activity frequently to determine when 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.