Economic nexus laws set out when a business must collect and remit (pay over) sales tax in a state. This applies even if the business has no physical presence there. In the past, businesses only owed sales tax in a state if they kept tangible personal property (physical goods) or ran operations there.
That changed after the South Dakota v. Wayfair decision. Now states enforce sales tax based on revenue. Some states also use a separate trigger based on the number of sales. A common past example is a $100,000 revenue threshold paired with a 200-transaction count. But that pairing is not universal, and it is becoming less common. Several states have repealed their transaction-count trigger entirely and now use only the dollar threshold. These include Alaska in 2025 and Illinois in 2026.
Thresholds and rules vary by state and change over time. So check the specific state guide for current numbers. Don’t rely on one example figure. Tools like Kintsugi automate this tracking. They help businesses meet their duties without manual effort.
Remote sellers are businesses that sell into a state from outside it. When they sell tangible personal property or digital goods, they can easily pass a state’s dollar threshold. Each state sets its own nexus threshold. So you must track revenue and sales carefully.
Without automation, businesses risk errors and missed deadlines, which lead to penalties. Platforms like Kintsugi make compliance simpler. They automate sales tax math and reports, so businesses can meet their sales tax duties across many states with confidence.
Thresholds and measurement rules change by state. This article is an educational overview, not tax advice. Confirm current rules with the relevant state tax authority before you act.
What is Economic Nexus?
Economic nexus is the link between a business and a state that creates sales tax duties. It applies even when the business has no physical presence there. In the past, businesses only had to collect and remit sales tax in states where they kept tangible personal property or had a clear physical presence. Examples are warehouses or offices.
But the Supreme Court’s ruling in South Dakota v. Wayfair changed everything. States can now enforce sales tax duties based on the total revenue or number of sales made in the state. If a business passes a state’s nexus threshold, by dollars or by number of sales, it must register, collect, and remit sales tax.
For example:
A Shopify business earning $100,000 in revenue in State A has triggered economic nexus and must follow its tax rules (some states also count a separate transaction total, so check the specific state's current rule).
These thresholds differ by state. So remote sellers need to stay informed and plan ahead for their compliance duties.
Platforms like Kintsugi can help businesses track economic nexus thresholds across states. That keeps them compliant without manual guesswork.
Economic Nexus vs. Physical Nexus
Physical nexus comes from a physical link to a state. Examples are a store, office, warehouse, employee, contractor, or stock held there. Economic nexus comes from passing a state's sales or transaction threshold. Wayfair added economic nexus as a trigger. It did not replace physical nexus. So a business can have physical nexus, economic nexus, both, or neither in a given state.
Why Economic Nexus Legislation Matters to Your Business
If you don’t follow economic nexus laws, you can face costly penalties, audits, and interest charges. States enforce nexus thresholds strictly. So even businesses with no physical presence must track their revenue and sales to meet their sales tax duties.
Keeping up with dollar thresholds can be hard for companies that sell tangible personal property in many states. This NSBA Report says small businesses face rising costs when they handle compliance by hand. Sales tax automation tools like Kintsugi Intelligence help businesses automate tracking and stay ahead of changing tax rules.
For remote sellers, growing online sales make it more likely that they cross nexus thresholds without knowing it. That can lead to uncollected sales tax and audit risks. For instance, say you pass a state’s dollar threshold in revenue or meet its sales-count threshold. Then you may need to register, collect, and file under that state’s rules and deadlines.
Platforms like Kintsugi automate tracking, registration, and filing. They help you follow each state’s economic nexus laws. With automation, businesses can cut errors, stay compliant, and focus on growth in many states.
How to Identify If You Have Economic Nexus
To check your economic nexus, track your revenue and sales. That shows whether you’ve crossed a state’s nexus threshold. Here’s how to find and manage your sales tax duties:
- Track Revenues and Dollar Thresholds: Watch total revenue in each state. If you pass a state’s dollar threshold, check whether you must register and collect under that state’s current rules.
- Count Transactions: Some states base economic nexus on the number of sales, even if revenue is below the threshold.
- Check Each State's Figure: $100,000 in annual sales is the most common threshold. But California and Texas use $500,000. New York requires more than $500,000 in sales and more than 100 sales. See the economic nexus threshold for every state.
- Combine Every Sales Channel: Shopify, Amazon, your own site, and wholesale orders each report sales differently. Combine them into one state-by-state total so you don't count too low or too high.
- Monitor Changes in State Tax Rules: States often change economic nexus thresholds and sales tax duties. Businesses need to keep up with these tax updates.
Tracking by hand creates big risks, especially for remote sellers with high sales volume. Platforms like Kintsugi automate tracking. They alert you when you meet a nexus threshold, so you stay compliant on time in every state where you do business.
Economic Nexus and Marketplace Sales
Marketplace facilitators such as Amazon, Etsy, and eBay collect and remit tax on eligible marketplace sales. They do this in every state with a sales tax (and DC). That can make a seller's duties simpler. But you still need to watch your overall activity.
Some states count marketplace sales toward their threshold. You may still need a permit or informational returns. You may also need to collect tax on sales through your own website or point of sale. Match up marketplace and direct sales separately. Then you know what the platform collected and what is still your job.
Economic Nexus and Remote Sellers
Under economic nexus laws, remote sellers are no longer exempt from sales tax just because they have no physical presence in a state. If you sell tangible personal property or digital goods across states, you must track revenue and sales. That’s how you know whether you meet nexus thresholds.
If a merchant passes a state’s dollar or sales-count threshold, it may need to register and collect sales tax under that state’s current rules. The Tax Policy Center points out the challenges for e-commerce businesses selling in many states. Platforms like Kintsugi can help. They automate threshold tracking and support accurate tax collection.
As online sales grow, remote sellers risk missing economic nexus thresholds. That can lead to audits or fines for uncollected sales tax. States now enforce economic nexus laws strictly. So tracking revenue and sales by hand isn’t practical. Tools like Kintsugi automate sales tax math and filings in every state. They help businesses meet their duties efficiently. With automation, remote sellers can cut errors and better manage their tax compliance.
How to Maintain Compliance with Economic Nexus Laws
Staying compliant with economic nexus laws takes a clear process for tracking, working out, and remitting sales tax. Here are three essential steps:
- Monitor Revenues and Thresholds: Use automation to track your dollar thresholds, sales, and each state’s rules. Kintsugi Intelligence is just one example of an automation tool that can simplify this. It helps businesses stay compliant in every state.
- Register for Sales Tax Permits: If you’ve crossed the nexus threshold, review the state’s registration and collection rules for tangible personal property and digital goods. Then register when required.
- Automate Tax Calculation and Filing: Platforms like Kintsugi handle real-time tax math and sales tax duties. They support filing on time and cut compliance errors.
With tools built for accuracy, businesses can cut manual effort and lower compliance risks in many states.
Key Takeaways
Economic nexus laws require businesses to collect and remit sales tax when they pass a state’s nexus threshold, based on revenue or sales.
Remote sellers must track their activity, even with no physical presence, to follow tax laws.
Tools like Kintsugi can automate tracking, sales tax math, and filings. They keep businesses compliant in every state.
Simplify Economic Nexus with Kintsugi
Managing economic nexus can be hard, because each state sets different nexus thresholds for revenue and sales. Platforms like Kintsugi automate compliance. They help businesses track sales tax duties in every state. With tools like Kintsugi, businesses can:
- Watch dollar thresholds in real time.
- Automate tax math.
- Simplify filings.
You might sell tangible personal property or digital goods. Either way, Kintsugi makes sales tax simpler. It supports accurate reports and easier management of your duties.
Kintsugi removes the manual work of tracking economic nexus for remote sellers. It automates sales tax collection and reports. With the platform’s integrations, businesses can meet their compliance needs efficiently and cut errors in tracking revenue and sales.
Look up the exact rate for any address with our US sales tax calculator.
