Sales tax nexus resources

Where are you required to collect sales tax? Visit our state-by-state guide to the different types of nexus and the laws affecting remote sellers in each state.

What is sales tax nexus?

Sales tax nexus is the connection between a seller and a state that requires the seller to register, collect, and remit tax on sales made in that state.

Our Know Your Nexus ebook answers the key questions every business should ask:

  • What triggers nexus?
  • How can you determine sales tax nexus?
  • What should you do when nexus is established?
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Interactive state-by-state guide to economic nexus rules for sales tax

Since the Supreme Court ruled on South Dakota v. Wayfair, Inc., many remote sellers are gearing up for additional sales tax obligations. Select the states where you make sales to see if your business has new sales tax obligations.

We can help with activities that trigger sales tax nexus

Physical presence

If your business has a physical presence in a state — such as a brick-and-mortar location — you’re required to collect and remit sales tax within that state. Physical presence also includes renting or owning property, employing remote workers, even storing property in a fulfillment center or location owned by someone else.

Sales volume

The ruling in South Dakota v. Wayfair, Inc. has paved the way for economic activity (i.e., sales or transaction volume alone) to establish economic nexus in many states. Following the decision, more than 40 states are now enacting or enforcing economic thresholds that require out-of-state sellers to register, collect, and remit sales tax.

 

Online referrals

Online referrals such as contracts with an individual or business in another state to directly or indirectly refer potential customers through a web link or an in-state website can establish nexus. This is sometimes called click-through nexus. Most states have tied a sales threshold to online referrals or click-through activity, meaning you must generate a certain amount of sales to trigger sales tax nexus.

Business relationships

Sales tax nexus can be established if an out-of-state retailer is affiliated with an entity that has nexus in another state. An affiliate connection includes using a similar trademark or conducting business on behalf of an out-of-state seller.

Remote employees

People can be your biggest asset, and can also trigger sales tax nexus in a new jurisdiction in some surprising ways. Employees that telecommute, independent contractors, traveling representatives, even employees sent to a conference or event can establish nexus in some states.

 

Other activities

While it’s easy to see why physical presence creates a connection, other activities are not so obvious. Advertising, drop shipping, or referrals from in-state businesses are all activities that can trigger sales tax nexus. Additional activities that establish nexus can be found in our Know Your Nexus ebook.

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