Economic nexus thresholds by state, 2026
Most states set economic nexus at $100,000 of sales into the state, measured over the current or previous calendar year.
By SF Business Solutions · Our team includes a licensed CPA · 5 sources · Updated September 19, 2026Five states differ on the dollar figure: California, Texas and New York at $500,000, Alabama and Mississippi at $250,000. Sixteen states plus Washington DC and Puerto Rico still count transactions as well, and that list keeps shrinking: Utah dropped its count on 1 July 2025, Illinois on 1 January 2026 and Kentucky on 1 August 2026. Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax.
The states that are not $100,000
Start here, because these are the ones a growing seller trips over. Everywhere else, assume $100,000 until you check.
| State | Threshold | Measured over |
|---|---|---|
| California | $500,000, no transaction count | Preceding or current calendar year; includes sales by related persons |
| Texas | $500,000, no transaction count | Preceding 12 calendar months |
| New York | $500,000 AND more than 100 sales | Immediately preceding four sales tax quarters; both tests must be met |
| Alabama | $250,000, no transaction count | Previous calendar year, direct sales only |
| Mississippi | $250,000, no transaction count | Any 12-month period |
| Connecticut | $100,000 AND 200 sales | 12 months ending 30 September; both tests must be met |
Where a transaction count still applies
A transaction count catches small sellers with many low-value orders: 200 orders at $30 is $6,000 of sales and can still create an obligation. As of September 2026 these states keep a count alongside the dollar test: Arkansas, Connecticut, Georgia, Hawaii, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, Ohio, Rhode Island, Vermont, Virginia and West Virginia, plus Washington DC and Puerto Rico.
In most of those the count is an alternative trigger, so either test creates nexus. In Connecticut and New York both tests must be met, which makes them harder to trip, not easier.
What changed in 2025 and 2026
The direction of travel is one way: states are dropping the transaction count and keeping the dollar threshold. No dollar threshold is known to have changed in 2025 or 2026.
- Alaska: local transaction count repealed 1 January 2025. Alaska has no statewide sales tax, but local jurisdictions tax through a shared commission.
- Utah: 200-transaction test repealed 1 July 2025, leaving $100,000.
- Illinois: 200-transaction test removed 1 January 2026, leaving $100,000 over a rolling 12-month lookback, tested quarterly.
- Kentucky: 200-transaction test removed 1 August 2026, and the $100,000 expressly counts services delivered into the state.
- New Jersey: bills to drop the count were introduced in 2026 but are not law. The 200-transaction test still applies.
What counts toward the threshold
There is no uniform rule, which is where most mistakes happen. New Jersey counts taxable services toward its $100,000 and Kentucky's threshold expressly counts services; California's $500,000 counts only sales of tangible personal property. Some states count gross sales including exempt and marketplace sales, others count only taxable retail sales.
Marketplace sales are the common trap. If a marketplace such as Amazon or Etsy collects the tax for you, some states still count those sales toward your own threshold and others do not. Check the state, not the general rule.
What to do about it
The practical version for a small seller: track sales by state monthly, watch the states you are closest to, and register before you cross rather than after. Registering late means the tax was still due on those sales, and you usually pay it out of your own margin.
Best for a business that would rather have this watched than discover it later: SF Business Solutions tracks sales by state as part of monthly bookkeeping, from $250 a month, and we prepare and file the returns. We are not a law firm, and nexus rules change by legislature, so treat this page as a starting point and confirm on the state's own site before you register. The thresholds here were checked in September 2026.
- Avalara, state-by-state guide to economic nexus laws (checked September 2026)
- California CDTFA, Wayfair and use tax collection requirements
- Texas Comptroller, remote seller thresholds (Publication 94-108)
- New York Department of Taxation and Finance, sales tax nexus
- Illinois Department of Revenue, Bulletin FY 2026-12
What is economic nexus?
An obligation to register and collect sales tax in a state because of how much you sell into it, with no office or staff there. It follows the 2018 South Dakota v. Wayfair decision.
What is the most common threshold?
$100,000 of sales into the state, measured over the current or previous calendar year. California, Texas and New York are $500,000; Alabama and Mississippi are $250,000.
Do transaction counts still matter?
In 16 states plus DC and Puerto Rico, yes. Utah, Illinois and Kentucky dropped theirs between July 2025 and August 2026, and more states are moving the same way.
Do marketplace sales count toward my threshold?
It depends on the state. Some count all sales into the state including marketplace sales; others count only your direct sales. Check the state's own guidance.
Which states have no sales tax?
Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax, though Alaska and Montana allow local taxes and Delaware has a gross receipts tax.
What happens if I registered late?
The tax was still due on the sales after you crossed, so it usually comes out of your margin, with interest and possible penalties. Some states run voluntary disclosure programmes.
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