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Economic Nexus: Collecting Sales Taxes in Other States

This article was last edited on 02/17/2020. For updated information on state sales tax and economic nexus, visit the state’s revenue department.

If you sell products online or otherwise sell to multiple states, you may have to start collecting sales tax in more places. Because of the South Dakota v. Wayfair Supreme Court case, states can now collect sales tax from you if you have economic nexus.

What’s economic nexus?

Before the South Dakota ruling, you only had to collect sales tax you had physical nexus – a physical presence in the state. Physical nexus includes having an employee who lives there or a warehouse full of inventory there.

Economic nexus, on the other hand, means that you have some sort of financial presence in the state. States that are starting to adopt this typically have a threshold for how much revenue you earn or how many transactions you have in the state before collecting sales tax.

Some states have “Notice and Reporting” laws on the books. When you meet those thresholds, you’ll either have to collect sales tax or provide sales reporting to the state and your customers so they can pay any taxes they owe.

Read also: How Do I Handle Sales Taxes?

State economic nexus laws

Most states now require you to collect sales tax if you have economic nexus. Keep reading to learn the necessary threshold(s) to collect sales tax in each state.

State Revenue in state Transactions into state Notes
Alabama $250,000 in the previous calendar year   Collect and remit taxes if you met the threshold requirement in the previous calendar year
Arizona $150,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
Arkansas $100,000 in gross revenue 200 or more Collect and remit taxes if you met either requirement in the previous calendar year
California $500,000 in gross revenue   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
Colorado $100,000 in gross revenue   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
Connecticut $100,000 in gross receipts 200 or more Must meet both thresholds in the previous 12 months before collecting and remitting sales taxes
Georgia $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Hawaii $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Idaho $100,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
Illinois $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous 12 months
Indiana $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Iowa $100,000 in gross revenue   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
Kansas Any Any Collect and remit taxes if you made any sales in Kansas
Kentucky $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Louisiana $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Maine $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Maryland $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Massachusetts $100,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
Michigan $100,000 in gross revenue 200 or more Collect and remit taxes if you met either requirement in the previous calendar year
Minnesota $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous 12 months
Mississippi $250,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous 12 months
Nebraska $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
Nevada $100,000 in gross revenue 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
New Jersey $100,000 in sales more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
New Mexico $100,000 in gross revenue   Collect and remit taxes if you met the threshold requirement in the previous calendar year
New York $500,000 in gross revenue more than 100 Must meet both thresholds in the last four quarters before collecting and remitting sales taxes
North Carolina $100,000 in gross revenue more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
North Dakota $100,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
Ohio $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
Oklahoma $100,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous 12 months
Pennsylvania $100,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous 12 months
Rhode Island $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in a calendar year
South Carolina $100,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
South Dakota $100,000 in sales more than 200 Collect and remit taxes if you met either requirement in the previous or current calendar year
Tennessee $500,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous 12 months
Texas more than $500,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous calendar year
Utah $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
Vermont $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
Virginia $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
Washington $100,000 in sales   Collect and remit taxes if you met the threshold requirement in the previous or current calendar year
West Virginia $100,000 in gross revenue 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
Wisconsin $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year
Wyoming $100,000 in sales 200 or more Collect and remit taxes if you met either requirement in the previous or current calendar year