Sales tax glossary
What is a nexus threshold?
A nexus threshold is the level of sales into a state that creates an obligation to collect its sales tax. Thresholds are usually a dollar amount of sales, sometimes paired with a number of transactions. Each state also decides which sales count and over what period they're measured.
Example
Under a hypothetical threshold of $100,000 in sales in the current or prior calendar year, a seller with $80,000 in sales this year and $110,000 last year already has nexus.
Why it matters for sellers
Thresholds differ by state in amount, measurement period, and whether exempt or marketplace sales count. Monitoring each one keeps you from registering late and owing tax you never collected.
Related terms
This definition is general information, not tax or legal advice. Rules vary by jurisdiction and change over time.
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