Last updated: May 2026. Economic nexus thresholds change frequently. This guide reflects the latest state-by-state rules, including states that have eliminated transaction-count thresholds in recent years.
One of the most significant factors influencing sales tax obligations is the concept of nexus. This comprehensive guide will delve into the intricacies of determining nexus with every state, emphasizing the role of Kintsugi as the premier solution for sales tax compliance.
What Is Nexus in a State?
Nexus refers to the connection between a business and a state that obligates the business to collect and remit sales tax in that state. Establishing nexus means that a business has sufficient presence or economic activity within a state, triggering tax responsibilities. Understanding what nexus is in a state is fundamental for businesses operating across multiple jurisdictions.
What Is Economic Nexus?
Economic nexus refers to a tax obligation triggered by a certain level of economic activity within a state. Unlike physical nexus, which is based on a business's physical presence, economic nexus is determined by sales revenue or the number of transactions. This concept ensures that businesses contributing economically to a state fulfill their tax obligations, even without a physical presence.
Economic Nexus vs. Physical Nexus
There are two primary types of nexus:
Physical Nexus: This is established when a business has a tangible presence in a state, such as an office, warehouse, or employees.
Economic Nexus: Introduced to address the rise of ecommerce, economic nexus is based on the volume of sales or number of transactions a business conducts within a state, regardless of physical presence.
How Do You Determine Nexus Thresholds by State?
Determining whether your business has established nexus in a state involves understanding the nexus threshold by state. Each state has its own criteria, typically based on sales revenue or the number of transactions, which can significantly impact a business's overall revenues. Below is a comprehensive table outlining the economic nexus thresholds for various states:
| State | Economic Nexus Threshold (Sales Revenue) | Economic Nexus Threshold (Number of Transactions) |
|---|---|---|
| Alabama | $250,000 | N/A |
| Arizona | $100,000 | N/A |
| California | $500,000 | N/A |
| Colorado | $100,000 | N/A |
| Florida | $100,000 | N/A |
| Indiana | $100,000 | N/A |
| Texas | $500,000 | N/A |
| New York | $500,000 | 100 transactions (both must be met) |
| ... | ... | ... |
Note: This table is not exhaustive. For detailed thresholds by state, refer to the comprehensive nexus thresholds by state.
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Kintsugi's 2026 Economic Nexus Table
Sales tax economic nexus laws vary significantly across states. While some states set high sales revenue thresholds, others incorporate transaction-based criteria. A notable trend in recent years is the elimination of transaction-count thresholds, leaving only dollar-amount thresholds: Wisconsin (2021), Maine (2022), Louisiana and South Dakota (2023), Indiana, North Carolina and Wyoming (2024), Utah (2025), and Illinois and Kentucky (2026) have all dropped them. Understanding these variations is essential for accurate tax compliance. Below is a detailed breakdown of sales tax economic nexus by state.
| State | Sales Threshold | Transaction Threshold | Measurement Period |
|---|---|---|---|
| Alabama | $250,000 (retail sales) | None | Previous calendar year |
| Alaska | No statewide sales tax; $100,000 for local sales tax in ARSSTC member jurisdictions | None (removed Jan 1, 2025) | Current or previous calendar year |
| Arizona | $100,000 | None | Current or previous calendar year |
| Arkansas | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| California | $500,000 | None | Current or previous calendar year |
| Colorado | $100,000 | None | Current or previous calendar year |
| Connecticut | $100,000 | 200 transactions (both tests must be met) | 12 months ending September 30 before the filing period |
| Delaware | No state sales tax | N/A | N/A |
| Florida | $100,000 (taxable remote sales) | None | Previous calendar year |
| Georgia | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| Hawaii | $100,000 (general excise tax) | 200 transactions (either test) | Current or previous calendar year |
| Idaho | $100,000 | None | Current or previous calendar year |
| Illinois | $100,000 | None (removed Jan 1, 2026) | Preceding 12 months |
| Indiana | $100,000 | None (removed Jan 1, 2024) | Current or previous calendar year |
| Iowa | $100,000 | None | Current or previous calendar year |
| Kansas | $100,000 | None | Current or previous calendar year |
| Kentucky | $100,000 | None (removed Aug 1, 2026) | Current or previous calendar year |
| Louisiana | $100,000 | None (removed Aug 1, 2023) | Current or previous calendar year |
| Maine | $100,000 | None (removed Jan 1, 2022) | Current or previous calendar year |
| Maryland | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| Massachusetts | $100,000 | None | Current or previous calendar year |
| Michigan | $100,000 | 200 transactions (either test) | Previous calendar year |
| Minnesota | $100,000 | 200 retail sales (either test) | Prior 12 months |
| Mississippi | $250,000 | None | Any 12-month period |
| Missouri | $100,000 (taxable sales) | None | Preceding 12 months, checked at the end of each quarter |
| Montana | No state sales tax | N/A | N/A |
| Nebraska | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| Nevada | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| New Hampshire | No state sales tax | N/A | N/A |
| New Jersey | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| New Mexico | $100,000 (taxable gross receipts) | None | Previous calendar year |
| New York | $500,000 | More than 100 sales (both tests must be met) | Preceding four sales tax quarters |
| North Carolina | $100,000 | None | Current or previous calendar year |
| North Dakota | $100,000 (taxable sales) | None | Current or previous calendar year |
| Ohio | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| Oklahoma | $100,000 | None | Current or previous calendar year |
| Oregon | No state sales tax | N/A | N/A |
| Pennsylvania | $100,000 | None | Current or previous calendar year |
| Rhode Island | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| South Carolina | $100,000 | None | Current or previous calendar year |
| South Dakota | $100,000 | None | Current or previous calendar year |
| Tennessee | $100,000 (retail sales) | None | Previous 12 months |
| Texas | $500,000 | None | Preceding 12 calendar months |
| Utah | $100,000 | None (removed July 1, 2025) | Current or previous calendar year |
| Vermont | $100,000 | 200 transactions (either test) | 12 months preceding the monthly tax period |
| Virginia | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| Washington | $100,000 | None | Current or previous calendar year |
| Washington, D.C. | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| West Virginia | $100,000 | 200 transactions (either test) | Current or previous calendar year |
| Wisconsin | $100,000 | None (removed Feb 20, 2021) | Current or previous calendar year |
| Wyoming | $100,000 | None | Current or previous calendar year |
Notes: Thresholds and regulations are subject to change. Always consult the respective state's official tax guidelines, including the economic nexus threshold by state, or a tax professional for the most current information.
For an exhaustive list, explore economic nexus by state.
FAQs
What Is Marketplace Nexus?
Marketplace nexus refers to the tax obligations that marketplaces (like Amazon or eBay) have when facilitating sales on behalf of third-party sellers. In many states, marketplaces are required to collect and remit sales tax on behalf of their sellers. Understanding marketplace nexus is essential for both marketplaces and individual sellers to ensure compliance with dollar threshold requirements.
How Does Kintsugi Handle Marketplace Nexus?
Kintsugi integrates with marketplaces like Amazon and Walmart Marketplace and helps determine nexus by state. The software uses economic thresholds (e.g., $100K in sales or, in states that still apply them, transaction counts) to determine where the seller has nexus based on marketplace or direct activity. It also tracks whether the seller needs to register in states even if the marketplace handles tax collection.
Specifics About Arizona Nexus Threshold
Focusing on Arizona nexus threshold, businesses must collect sales tax if they exceed $100,000 in sales within the state. Understanding this specific requirement is crucial for businesses operating in or expanding to Arizona. Kintsugi simplifies this process by providing accurate calculations and automated remittances tailored to Arizona's regulations. Visit our Arizona Tax page for detailed information.
What Are the Sales Tax Compliance Challenges for Ecommerce?
Ecommerce businesses face unique challenges in sales tax compliance, including navigating the complexities of Arizona economic nexus and Indiana sales tax nexus legislation:
Diverse State Laws: Each state has its own set of taxation laws and state sales tax thresholds, including nexus laws by state.
Frequent Law Changes: Tax regulations are subject to change, requiring businesses to stay updated.
Complex Calculations: Accurate tax calculations across multiple jurisdictions can be intricate.
How Can Kintsugi Overcome These Challenges?
Kintsugi addresses these challenges by providing:
Real-Time Updates: The platform stays current with the latest tax laws, ensuring compliance.
Accurate Calculations: Automated tax calculations eliminate the risk of errors.
Centralized Management: Manage all your tax obligations from a single, intuitive dashboard.
Explore our Sales Tax Compliance features for more information.
How Can Kintsugi Simplify Sales Tax Compliance?
Navigating the complexities of sales tax compliance can be daunting, especially for businesses operating in multiple states with nexus. Kintsugi emerges as the best option, offering a robust platform that streamlines the entire process. Unlike other providers, Kintsugi provides seamless integration, accurate tax calculations, and automated filings, ensuring businesses remain compliant effortlessly.
Why Choose Kintsugi Over Other Providers?
When comparing sales tax automation tools, Kintsugi stands out due to its comprehensive features and user-friendly interface. Here's why Kintsugi is the superior choice:
Comprehensive Integration: Kintsugi integrates seamlessly with major ecommerce platforms, ensuring real-time tax calculations.
Automated Compliance: The platform automates tax filings and remittances, reducing the risk of errors and penalties.
Scalable Solutions: Whether you're a small business or a large enterprise, Kintsugi scales to meet your needs.
Reliable Support: Our dedicated support team is always ready to assist.
For more details on Kintsugi's offerings, visit our Product Platform page.
Final Thoughts
Why Kintsugi Is Your Go-To Solution for Remitting Sales Tax
In the ever-evolving realm of ecommerce, understanding and complying with ecommerce sales tax nexus laws is essential for sustained success. Kintsugi stands out as the best option for businesses seeking reliable, efficient, and comprehensive sales tax compliance solutions. By leveraging Kintsugi's advanced features, businesses can navigate the complexities of remitting sales tax with ease, ensuring compliance and fostering growth.
Embrace the future of sales tax compliance with Kintsugi and stay ahead of the curve. With Kintsugi you enjoy flexible pricing with no annual commitments. View Kintsugi plans and pricing.
Additional Resources
Sales Tax by State: Explore detailed tax information for each state on our Tax by State page.
Kintsugi Intelligence: Gain insights into sales tax trends and compliance tips with our Kintsugi Intelligence feature.
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