When Does an Online Seller Have Sales Tax Nexus in Another State?
An online seller has sales tax nexus in a state when it has a physical presence there, or when its sales into the state pass that state's economic nexus threshold. As of September 2026 that threshold is $100,000 of sales a year in most states and $500,000 in California, Texas and New York. States have been able to set these thresholds since the Supreme Court's South Dakota v. Wayfair decision in June 2018.
By SF Business Solutions · Our team includes one licensed CPA · 3 sources · Updated September 10, 2026
Physical nexus and economic nexus
Physical nexus comes from being there: an office, employees, or inventory stored in the state, including in a fulfillment warehouse. Economic nexus comes from selling there. On June 21, 2018, in South Dakota v. Wayfair, the Supreme Court overruled the physical presence rule from Quill and upheld South Dakota's law, which applied to sellers with more than $100,000 of sales or 200 separate transactions into the state a year. Every state with a sales tax now has an economic nexus rule of its own.
Thresholds in 12 large states
Thresholds and measurement periods from the Sales Tax Institute's state guide, updated August 2026. Several states have dropped the 200-transaction test they started with, so check the current rule before relying on an old list.
| State | Economic nexus threshold | Measured over |
|---|---|---|
| California | $500,000 of sales | Preceding or current calendar year |
| Texas | $500,000 of sales | Preceding twelve calendar months |
| New York | $500,000 and more than 100 sales | Preceding four sales tax quarters |
| Florida | $100,000 of sales | Previous calendar year |
| Illinois | $100,000 of sales | Preceding 12 months |
| Washington | $100,000 of sales | Current or preceding calendar year |
| Georgia | $100,000 or 200 sales | Previous or current calendar year |
| Pennsylvania | $100,000 of sales | Prior calendar year |
| North Carolina | $100,000 of sales | Previous or current calendar year |
| Arizona | $100,000 of sales | Previous or current calendar year |
| Colorado | $100,000 of sales | Previous or current calendar year |
| Ohio | $100,000 or 200 transactions | Previous or current calendar year |
Marketplaces: who collects the tax
When you sell through a marketplace such as Amazon, the marketplace usually collects and remits the sales tax on those orders. Amazon calculates, collects and remits tax on third-party sales shipped to states with marketplace facilitator laws. That covers the tax on those orders, but not necessarily your own obligations.
States differ on whether your marketplace sales count toward your own threshold, and on whether you still need to register and file returns when the marketplace collects everything. If you also sell through your own Shopify store or wholesale, those direct sales are yours to collect on once you have nexus.
What to do when you cross a threshold
Nexus is not a problem in itself; collecting nothing after you have it is. When sales into a state approach its threshold:
- Register for a sales tax permit in that state before you start collecting
- Turn on tax collection for that state in your store and invoicing software
- File returns on the schedule the state assigns, including zero returns where required
- Keep resale and exemption certificates for any sales you do not tax
- If you crossed a threshold in the past and never collected, talk to a tax adviser about the state's voluntary disclosure options
Working with SF Business Solutions
When we keep your books, sales are recorded by state each month, so you can see a threshold coming before you cross it. Monthly bookkeeping starts at $250 a month. Registering and filing in each state is a separate piece of work we can discuss on a consult.
What is economic nexus?
A duty to collect a state's sales tax that comes from your sales into the state, not from being there. Most states set it at $100,000 of sales a year; California, Texas and New York use $500,000.
Do my Amazon sales count toward my threshold?
It depends on the state. Amazon collects and remits the tax on those orders in states with marketplace facilitator laws, but some states still count them toward your own threshold. Check each state's rule.
What is the sales tax nexus threshold in Texas?
$500,000 of sales into Texas over the preceding twelve calendar months, as of September 2026.
Do I need to collect sales tax on my own Shopify store sales?
Yes, in every state where you have nexus. Marketplaces collect on marketplace orders; direct sales through your own store are your responsibility.
What did South Dakota v. Wayfair decide?
On June 21, 2018 the Supreme Court held that a state can require an out-of-state seller to collect sales tax without a physical presence, overruling Quill.
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