What is sales tax nexus in the US?
Last updated: 2026-08-02·Verified: 2026-08-02
📋 Direct Answer
Nexus is the connection between a seller and a state that triggers a sales tax collection obligation. Two types: (1) Physical nexus — you have property, employees, or inventory in a state (e.g. Amazon FBA warehouse), (2) Economic nexus — you exceed a state's sales/revenue threshold (typically $100K in sales or 200 transactions). Since South Dakota v. Wayfair (2018), states can require remote sellers to collect sales tax based on economic nexus alone. 46 states + DC have economic nexus laws.
Item by Item
RequiredPhysical NexusN/AImmediate
- 1Check if you have any physical presence in a state
- 2FBA warehouses in a state create physical nexus
- 3Having employees or property also creates nexus
If applicableEconomic NexusN/AVaries
- 1Track sales revenue and transaction count per state
- 2Most states: $100K in sales OR 200 transactions
- 3Some states have different thresholds
- 4Must register and collect once threshold is exceeded
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- • South Dakota v. Wayfair (2018)
- • Multi-State Tax Commission guidance
Disclaimer: This page is for informational purposes only and does not constitute legal or tax advice. Consult a professional for your specific situation.