Understanding Economic Nexus: A State-by-State Guide

Navigating economic nexus laws is essential for e-commerce businesses to stay compliant with state sales tax regulations. With each state having unique thresholds and rules, determining where you owe sales tax can be complex. This guide breaks down how to identify economic nexus for your online store including dollar threshold, economic nexus legislation, physical presence, tangible personal property and more to ensure you meet your obligations with ease and accuracy.

Alabama

What counts: Total amount of tangible personal property delivered to the state at retail. Non-collecting marketplace sales are included, while sales done through a registered marketplace facilitator are excluded. sales of physical products, digital goods, or marketplace sales made in the state.

Exemptions: Sales that are tax-exempt are not counted towards the threshold.

Trigger: Sales amount only

Threshold: $250,000 in sales

When to register: January 1st of the year after the threshold is reached

Alaska

What counts: All statewide sales of goods, services, or products, including marketplace sales, delivered into the state. Remote sellers establishing nexus are also counted.

Exemptions: Tax-exempt sales and services count towards the threshold.

Trigger: Sales amount only (Note: Alaska removed its 200 transactions threshold effective January 1, 2025)

Threshold: $100,000 in sales

When to register: The first day of the month following 30 days of adoption by the city or borough.

Arizona

What counts: Gross income from state-based businesses or gross earnings from the sale of tangible personal property or services. The threshold includes services but not marketplace-based sales.

Exemptions: Tax-exempt sales are not counted

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Once the threshold is reached, the seller needs to get a TPT license and start paying taxes on the first day of the month that begins at least 30 days after the threshold is reached for the remainder of this year and the following year.

Arkansas

What counts: Sales of physical products, digital goods, and taxable services, including marketplace sales, delivered into Arkansas.

Exemptions: Tax-exempt sales are not included.

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Subsequent transaction after reaching the threshold

Check out Arkansa's sales tax guide.

California

What counts: Sales of physical goods, including marketplace and digital product sales, delivered into the state.

Exemptions: The threshold does not include exempt services, but it does include exempt sales (i.e., nontaxable sales like sales for resale)

Trigger: Sales amount only

Threshold: $500,000 in sales

When to register: The day you surpass the threshold

Check out California's sales tax guide.

Colorado

What counts: Sales of physical goods, digital products, and taxable services, including marketplace sales in the state.

Exemptions: Tax-exempt sales are included in the thresholds except wholesales.

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: The first day of the month after the 90th day of the current year in which the retailer's retail sales exceeded $100,000

Check out Colorado's sales tax guide.

Connecticut

What counts: Sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Exempt sales and exempt services (apart from sales for resale) are not included in the transaction threshold, although they are included in the sales threshold together with sales made through an online marketplace.

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: October 1 of the year in which you cross the threshold on September 30

Check out Connecticut's sales tax guide.

Florida

What counts: Sales of physical goods, digital goods, and marketplace sales delivered into Florida.

Exemptions: Tax-exempt sales and services are not included in the threshold

Trigger: Sales amount only

Threshold: $100,000

When to register: First day of calendar year after reaching the threshold

Check out Florida's sales tax guide.

Georgia

What counts: Gross income from retail sales of tangible personal property that is physically or electronically transported to the state location for use, consumption, or storage.

Exemptions: The threshold does not cover exempt services, but it does include exempt sales (with the exception of resales).

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Next transaction after reaching the threshold

Check out Georgia's sales tax guide.

Hawaii

What counts: Sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: The first of the month after surpassing the threshold

Check out Hawaii's sales tax guide.

Idaho

What counts: Gross receipts from sales throughout time, including taxable goods and services. and

Exemptions: Tax-exempt sales and services are in included the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Next transaction after establishing an economic nexus

Check out Idaho's sales tax guide.

Illinois

What counts: Total gross receipts, excluding sporadic sales, from the sale of tangible personal property and property sold in connection with a state service.

Exemptions: The threshold does not apply to sales made via a marketplace facilitator, sale for resale and exempt services.

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Every quarter, business owners will assess if they meet the economic nexus for the previous 12 months

Check out Illinois sales tax guide.

Indiana

What counts: Gross income from the sales of physical goods, digital goods, and taxable services, including marketplace sales

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Next transaction after surpassing the threshold

Check out Indiana's sales tax guide.

Iowa

What counts: Gross income from the sales of physical goods, certain digital products, and taxable services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: The first day of the next calendar month that starts at least 30 days after establishing an economic nexus.

Check out Iowa sales tax guide.

Kansas

What counts: Total gross sales from sales made by the retailer in the state.

Exemptions: Tax-exempt sales are not included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Next transaction after reaching the threshold

Check out Kansas' sales tax guide.

Kentucky

What counts: Gross income from the sale of digital or physical personal property that is delivered or transferred into the Commonwealth via electronic means.

Exemptions: Tax-exempt sales are included in the threshold but not tax-exempt services

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: The first day of the next calendar month that starts at least 30 days after establishing an economic nexus.

Check out Kentucky's sales tax guide.

Louisiana

What counts: Gross revenues from the sale of digital or physical personal property that is delivered or transferred into the state.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Within 30 days after establishing an economic nexus

Check out Louisiana's sales tax guide.

Maine

What counts: Gross sales of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales are included in the threshold but tax-exempt services are not

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: The first day of the next calendar month that starts at least 30 days after establishing an economic nexus

Check out Maine's sales tax guide.

Maryland

What counts: Gross sales of tangible personal property, digital goods, and taxable services.

Exemptions: Tax-exempt sales are included in the threshold but tax-exempt services are not.

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: First day of the month after reaching the threshold

Check out Maryland's sales tax guide.

Massachusetts

What counts: Sales of physical goods, digital goods, and services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: The first day of the next calendar month that starts two months after establishing an economic nexus

Check out Massachusetts' sales tax guide.

Michigan

What counts: Sales of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: January 1st of the year after the threshold is reached

Check out Michigan's sales tax guide.

Minnesota

What counts: Sales of physical goods, digital goods, and services, including retail sales made into the state from other states.

Exemptions: Tax-exempt sales are included in the threshold, but sales for resales and exempt services are not.

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: First day of the month and not later than 60 days after establishing an economic nexus.

Check out Minnesota's sales tax guide.

Mississippi

What counts: Total sales into the state from remote sellers, including services.

Exemptions: Tax-exempt sales and services are included in the threshold.

Trigger: Sales amount only

Threshold: $250,000 in sales

When to register: Next transaction after surpassing the threshold.

Check out Mississippi's sales tax guide.

Missouri

What counts: Sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sales are not included

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Three months after the end of the quarter when the seller exceeds the threshold.

Check out Missouri's sales tax guide.

Nebraska

What counts: Total retail sales made in the state.

Exemptions: Tax-exempt sales and services are included in the threshold except for resales, sublease, or sub-rent

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: The second calendar month's first day after establishing an economic nexus.

Check out Nebraska's sales tax guide.

Nevada

What counts: Total retail sales of physical goods, digital goods, and taxable services, except sale for resale.

Exemptions: Exempt services are excluded from the threshold, but it does include exempt sales except for resale sales

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register:

Check out Nevada's sales tax guide.

New Jersey

What counts: Sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sales are not included

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: By the first day of the following calendar month, at least 30 days after reaching the threshold

Check out New Jersey's sales tax guide.

New Mexico

What counts: Total taxable gross receipts from tangible personal property sales, leases, and licenses, including sales of licenses and services of licenses for real property in the state

Exemptions: Tax-exempt sales and services are not included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: January 1st of the year after the threshold is reached

Check out New Mexico's sales tax guide.

New York

What counts: Total gross receipts from tangible personal property given to the state over time (SaaS is regarded as TPP), including marketplace sales. 

Exemptions: Tax-exempt sales are included in the threshold, but exempt services are excluded

Trigger: Sales amount or transaction count

Threshold: $500,000 in sales or 100 transactions

When to register: Within 30 days after establishing an economic nexus

Check out New York's sales tax guide.

North Carolina

What counts: Total sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Next transaction after establishing an economic nexus.

Check out North Carolina's sales tax guide.

North Dakota

What counts: Gross taxable sales of taxable services, tangible personal property, and other goods.

Exemptions: Tax-exempt sales and services are not included in the threshold.

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: 60 days after the threshold is reached or the next calendar year, whichever comes first

Check out North Dakota's sales tax guide.

Ohio

What counts: Gross receipts from the sale of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Next day after reaching the economic nexus.

Check out Ohio's sales tax guide.

Oklahoma

What counts: Total sales of physical goods, digital goods, and marketplace sales.

Exemptions: Tax-exempt sales and services are not included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: First calendar month, the month after surpassing the threshold

Check out Oklahoma's sales tax guide.

Pennsylvania

What counts: Sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: April 1 following the calendar year after surpassing the threshold

Check out Pennsylvania's sales tax guide.

Puerto Rico

What counts: Total gross sales in the state

Exemptions: Tax-exempt sales are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Next transaction after establishing an economic nexus

Check out Puerto Rico's sales tax guide.

Rhode Island

What counts: Gross sales from physical goods, digital goods, and taxable services delivered into the state.

Exemptions: Tax-exempt sales are included in the threshold but exempt services are excluded

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: January 1st of the year after the threshold is reached.

Check out Rhode Island's sales tax guide.

South Carolina

What counts: Gross sales of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: First day of the second calendar month after reaching the threshold

Check out South Carolina's sales tax guide.

South Dakota

What counts: Gross sales of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Next transaction after establishing an economic nexus

Check out South Dakota's sales tax guide.

Tennessee

What counts: Sales of physical goods, digital goods, and taxable services.

Exemptions: Exempt sales and exempt services are included in the threshold, but resales and online marketplace sales are excluded

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: The first day of the third month, the month after reaching the threshold

Check out Tennessee's sales tax guide.

Texas

What counts: Gross revenue of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $500,000 in sales

When to register: The first day of the fourth month, the month after reaching the threshold

Check out Texas' sales tax guide.

Utah

What counts: Total sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Next transaction after reaching the nexus (state doesn't specify)

Check out Utah's sales tax guide.

Vermont

What counts: Total sales of physical goods, digital goods, taxable services delivered into the state.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: First day of the month after 30 days from the end of the quarter of exceeding the threshold

Check out Vermont's sales tax guide.

Virginia

What counts: Total retail sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Exempt sales, excluding resales, are included in the threshold. Exempt services are also excluded.

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Next transaction after establishing an economic nexus

Check out Virginia's sales tax guide.

Washington

What counts: Gross sales from physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sales are not included

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: First day of the month, starting 30 days after surpassing the threshold

Check out Washington's sales tax guide.

Washington, D.C.

What counts: Total retail sales from physical goods, digital goods, marketplace sales and taxable services delivered in the district.

Exemptions: Exempt sales, excluding resales and exempt services, are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: First day of the month, starting 30 days after surpassing the threshold

Check out Washington DC's sales tax guide.

West Virginia

What counts: Gross sales of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount or transaction count

Threshold: $100,000 in sales or 200 transactions

When to register: Next transaction (state doesn't specify)

Check out West Virginia's sales tax guide.

Wisconsin

What counts: Annual gross sales of physical goods, digital goods, and taxable services, including marketplace sales.

Exemptions: Tax-exempt sale and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Next transaction after reaching the threshold

Check out Wisconsin's sales tax guide.

Wyoming

What counts: Sales of physical goods, digital goods, and taxable services.

Exemptions: Tax-exempt sales and services are included in the threshold

Trigger: Sales amount only

Threshold: $100,000 in sales

When to register: Next transaction after reaching the threshold

Check out Wyoming's sales tax guide.

Staying compliant with economic nexus requirements is vital in today's digital-driven business landscape. By understanding your nexus obligations and leveraging automated solutions like Kintsugi, you can streamline your sales tax processes and focus on growing your business.

Whether you're looking to understand nexus by state or seeking comprehensive tax automation solutions, Kintsugi is your partner in simplifying complex sales tax compliance.