Sales tax nexus resources

Explore the resources below to learn about activity that can establish a nexus obligation for your business.

What is sales tax nexus?

Sales tax nexus is the connection between a seller and a state that requires the seller to register then collect and remit sales tax in the state. Certain business activities, including having a physical presence or reaching a certain sales threshold, may establish nexus with the state.

Figure out where you should collect sales tax

Discover where your sales may create an obligation to collect sales tax with our interactive sales tax risk assessment tool.

Our Know Your Nexus ebook answers these key questions:
  • What business activities trigger nexus?
  • How do you determine sales tax nexus?
  • What should you do when nexus is established?

Learn more from our Sales tax nexus 101 webinar series

Part 1: What is sales tax nexus?

Part 2: How to build a nexus plan for your business

Business activities that trigger sales tax nexus

Economic activity

The ruling in South Dakota v. Wayfair, Inc. allows states to base a sales tax collection obligation on sales or transaction volume (economic nexus). More than 43 states now enforce economic nexus.

Physical presence

Physical presence in a state — such as a brick-and-mortar location — creates an obligation 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.

Remote employees

People can be your biggest asset but can also trigger sales tax nexus in more jurisdictions. Independent contractors, telecommuting employees, traveling representatives, and even trade show attendance can establish nexus in some states.

Click-through nexus

Having agreements to reward persons in another state for directly or indirectly referring potential customers through a web link or in-state website can establish what’s often referred to as click-through nexus.

Affiliate 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.

Other activities

Advertising, drop shipping, or receiving referrals from in-state businesses are all activities that can trigger sales tax nexus. Information about additional activities that establish nexus can be found in our Know Your Nexus ebook.

Do you know where you have to collect?

Nexus obligations vary from state to state. See how Avalara AvaTax helps you stay compliant by tracking the states where you’re approaching an economic nexus threshold and letting you know where you need to register.

Latest nexus news from Avalara experts

Your next steps
Realize you have a nexus obligation and need to get registered? Try Avalara Licensing.
Want to assess your sales tax nexus risk? Chat with us about available options.