In the post-Wayfair era, where physical presence is no longer required to be subject to a state’s sales tax, states continue to enact sales tax economic nexus provisions for remote sellers. If you are a business selling goods into multiple states, it is important for you to keep track of your sales and transactions by state, so that once you exceed a state’s annual economic nexus threshold, you can timely register and begin to collect and remit sales tax.
Economic Nexus Requirements by State
| State | Annual Sales Threshold | And/Or | Annual Transaction # Threshold |
|---|---|---|---|
| Alabama | $250,000 | ||
| Alaska (local jurisdictions only) | $100,000 | Or | 200 |
| Arizona | $150,000 for 2020 $100,000 for 2021 |
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| Arkansas | $100,000 | Or | 200 |
| California | $500,000 | ||
| Colorado | $100,000 | ||
| Connecticut | $100,000 | And | 200 |
| Georgia | $100,000 | Or | 200 |
| Hawaii | $100,000 | Or | 200 |
| Idaho | $100,000 | ||
| Illinois | $100,000 | Or | 200 |
| Indiana | $100,000 | Or | 200 |
| Iowa | $100,000 | ||
| Kansas1 | |||
| Kentucky | $100,000 | Or | 200 |
| Louisiana | $100,000 | Or | 200 |
| Maine | $100,000 | Or | 200 |
| Massachusetts | $100,000 | ||
| Maryland | $100,000 | Or | 200 |
| Michigan | $100,000 | Or | 200 |
| Minnesota | $100,000 | Or | 200 |
| Mississippi | $250,000 | ||
| Nebraska | $100,000 | Or | 200 |
| Nevada | $100,000 | Or | 200 |
| New Jersey | $100,000 | Or | 200 |
| New Mexico | $100,000 | ||
| New York | $500,000 | And | 100 |
| North Carolina | $100,000 | Or | 200 |
| North Dakota | $100,000 | ||
| Ohio | $100,000 | Or | 200 |
| Oklahoma | $100,000 | ||
| Pennsylvania | $100,000 | ||
| Puerto Rico | $50,000 | Or | 200 |
| Rhode Island | $100,000 | Or | 200 |
| South Carolina | $100,000 | ||
| South Dakota | $100,000 | Or | 200 |
| Tennessee | $100,000 | ||
| Texas | $500,000 | ||
| Utah | $100,000 | Or | 200 |
| Vermont | $100,000 | Or | 200 |
| Virginia | $100,000 | Or | 200 |
| Washington | $100,000 | ||
| Washington, D.C. | $100,000 | Or | 200 |
| West Virginia | $100,000 | Or | 200 |
| Wisconsin | $100,000 | Or | 200 |
| Wyoming | $100,000 | Or | 200 |
To learn more about the tax implications of the South Dakota v. Wayfair Inc. decision, you can read Supreme Court Decision Allows States to Impose Sales Tax on Online Retailers.
If you have any questions regarding sales tax exposure or multistate economic nexus rules, our state and local tax team would be glad to help you.
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Footnotes
- Kansas has not adopted a sales/use tax economic nexus provision. However, the Kansas Department of Revenue takes the position that a remote seller with no physical presence in Kansas is required to collect and remit applicable sales/use tax on sales delivered to Kansas, as provided under the Constitution and the laws of the United States. A conservative approach is to apply the Wayfair economic nexus standard to determine Kansas nexus, following the $100,000 annual revenue or 200 annual transactions thresholds.
