Summary: Since South Dakota v. Wayfair (2018), every state with a sales tax can require remote sellers to collect once they cross an economic nexus threshold, most commonly $100,000 in sales or 200 transactions into the state per year. Physical presence is no longer required. Sellers must track thresholds state by state, register for permits where they have nexus, and collect the destination-sourced rate.
Before 2018, a state could only make you collect sales tax if you had a physical presence there: a store, a warehouse, an employee. The Supreme Court's Wayfair decision ended that rule, and within two years every sales-tax state had an economic nexus law. If you sell online, this is the compliance regime you live under.
In South Dakota v. Wayfair (2018), the Supreme Court upheld South Dakota's law requiring remote sellers with more than $100,000 in sales or 200 transactions into the state to collect sales tax, overturning the physical-presence rule from Quill (1992). The Court blessed South Dakota's thresholds as the model, and nearly every state copied them: today the standard economic nexus threshold is $100,000 in gross sales or 200 separate transactions into the state in the current or prior calendar year.
Variations exist and they matter. Some states use only a sales threshold with no transaction count. Some exclude marketplace sales from the calculation because the marketplace collects. A few measure the threshold on retail sales only, excluding wholesale. The direction of travel is toward simplification, several states have dropped their transaction thresholds in recent years, but you must check each state's current rule rather than assuming the $100k/200 model.
Generally, gross retail sales of tangible goods into the state count, including exempt sales in many states, which surprises sellers who assume exempt sales do not matter. Marketplace sales where the facilitator collects are typically excluded from your threshold calculation, since you are not the collector on those orders. Services count only if the state taxes them and you sell them.
The measurement period is usually the current or preceding calendar year, and nexus, once established, typically persists through the following year at minimum. Some states require you to register within a set number of days of crossing the threshold. Crossing in November and discovering it in February is the classic expensive mistake: you owed collection from the crossing date, and voluntary disclosure is cheaper than an audit finding it.
Once you have nexus in a state, the sequence is: register for a seller's permit (free in most states, a small fee in some), configure collection in your cart or marketplace for the correct destination-sourced rates, collect from customers, file returns on the state's schedule (monthly, quarterly, or annually based on volume), and remit what you collected. Returns are due even in periods with zero tax collected; forgetting a zero return draws penalties in many states.
For sellers in many states, the practical answer is sales tax automation software that tracks thresholds, registers permits, calculates ZIP-level rates, and files returns. The cost is modest next to the alternative: manual compliance across 20-plus states is a part-time job, and the penalties for getting it wrong include the uncollected tax itself, which comes out of your margin.
Three traps catch growing sellers. The first is the transaction threshold: 200 small transactions can trip nexus in a state where $100,000 of sales would not, which punishes low-ticket sellers. Several states have recognized this and dropped their transaction thresholds, but not all. The second is affiliate and click-through nexus, which predates Wayfair and still exists: in-state affiliates or referrers can create nexus even below economic thresholds. The third is the trade-show trap: exhibiting or selling at a show in a state creates physical-presence nexus immediately, sometimes requiring a temporary seller's permit for a single weekend.
$100,000 in sales or 200 transactions into the state per year, following the South Dakota model upheld in Wayfair. Some states use sales-only thresholds or different amounts, so verify each state.
No. Since Wayfair (2018), economic activity alone creates nexus. Physical presence still creates nexus too, but it is no longer required.
Usually not for the collection duty, because marketplace facilitator laws make the marketplace the collector. Many states also exclude marketplace sales from your threshold calculation, but rules vary.
You generally owe the uncollected tax out of pocket, plus penalties and interest. Voluntary disclosure programs in most states reduce penalties if you come forward before an audit.
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Figures: 2026. Sources: the Tax Foundation (2026 Sales Tax Rates, Midyear Update, as of July 1, 2026), state revenue department websites, and the US Supreme Court (South Dakota v. Wayfair, 2018). This page is for planning only and is not financial, tax, or legal advice. Verify with the cited source or a qualified professional.