Sales Tax Nexus Thresholds by State: 2026 Complete Guide
Every state with sales tax has set economic nexus thresholds that determine when out-of-state sellers must collect tax. This guide provides current thresholds for all 45 states plus Washington D.C., helping you understand your compliance obligations.
Since the 2018 South Dakota v. Wayfair decision, states can require out-of-state sellers to collect sales tax based on their economic activity rather than physical presence. As explained in our Complete Guide to Sales Tax Nexus, understanding these thresholds is essential for any business selling across state lines.
Thresholds vary significantly by state. Some use revenue-only tests, others combine revenue with transaction counts, and a few have unique rules that require careful attention. This guide breaks down what you need to know to stay compliant.
Thresholds Change Regularly
States periodically adjust their nexus thresholds. While this guide reflects current requirements as of February 2026, always verify thresholds directly with state tax authorities before making compliance decisions.
Revenue vs. Transaction Count Thresholds
States use two primary metrics to determine economic nexus: gross revenue from sales into the state and the number of separate transactions. Understanding how each works helps you track your exposure accurately.
Revenue-Only States
The majority of states have moved to revenue-only thresholds, typically set at $100,000. This simplifies compliance because you only need to track total sales volume, not individual transaction counts. Major states using revenue-only thresholds include California, Texas, Florida, and New York.
States with Transaction Count Tests
Some states maintain transaction count thresholds alongside revenue tests, typically requiring 200 transactions. In these states, meeting either threshold triggers nexus obligations. This can catch businesses with high transaction volumes but low average order values.
For a deeper understanding of how the Wayfair decision created these thresholds and how they apply to different business models, see our guide on Economic Nexus Explained.
Track Both Metrics
Even if a state only uses revenue thresholds today, tracking transaction counts provides useful data for states that still use both metrics and helps you anticipate threshold changes.
Major State Thresholds
The table below shows economic nexus thresholds for the largest states by population and economic activity. These states represent where most businesses first encounter nexus obligations.
| State | Revenue Threshold | Transaction Count | Notes |
|---|---|---|---|
| California | $500,000 | None | Higher threshold than most states |
| Texas | $500,000 | None | Revenue-only test |
| Florida | $100,000 | None | Effective July 2021 |
| New York | $500,000 | 100 transactions | Both thresholds must be met |
| Pennsylvania | $100,000 | None | Revenue-only test |
| Illinois | $100,000 | 200 transactions | Either threshold triggers nexus |
| Ohio | $100,000 | 200 transactions | Either threshold triggers nexus |
| Georgia | $100,000 | 200 transactions | Either threshold triggers nexus |
| North Carolina | $100,000 | 200 transactions | Either threshold triggers nexus |
| Michigan | $100,000 | 200 transactions | Either threshold triggers nexus |
| New Jersey | $100,000 | 200 transactions | Either threshold triggers nexus |
| Virginia | $100,000 | 200 transactions | Either threshold triggers nexus |
| Washington | $100,000 | None | Revenue-only test |
| Arizona | $100,000 | None | Revenue-only test |
| Massachusetts | $100,000 | None | Revenue-only test |
Understanding New York's Unique Rule
New York stands apart from other states by requiring sellers to meet both the revenue threshold ($500,000) AND the transaction threshold (100 transactions) before nexus is established. This "AND" requirement rather than "OR" provides more protection for smaller sellers, making New York one of the more business-friendly states for nexus purposes.
States with No Sales Tax
Five states do not impose a general sales tax, meaning there are no economic nexus thresholds to track for these jurisdictions:
Alaska
Delaware
Montana
New Hampshire
Oregon
Alaska Exception
While Alaska has no state-level sales tax, many local jurisdictions within Alaska do impose local sales taxes. Remote sellers may have obligations to collect and remit these local taxes depending on their sales volume into specific Alaska localities.
How to Track Thresholds Across States
Tracking sales and transactions across 45 states requires systematic processes. Without proper tracking, you risk either non-compliance (failing to collect when required) or premature registration (collecting unnecessarily). Here are the key approaches:
Manual Tracking
For businesses selling in fewer than 10 states, spreadsheet-based tracking can work if maintained diligently:
- Export sales data monthly from your e-commerce platform or accounting system
- Categorize sales by customer ship-to state (not billing address)
- Track cumulative revenue and transaction count by state for the measurement period
- Set alerts at 75% and 90% of thresholds to allow preparation time
Automated Sales Tax Software
For businesses with higher volumes or selling across many states, sales tax automation software provides significant advantages:
- Real-time threshold monitoring: Automated alerts when approaching nexus thresholds in any state
- Accurate rate calculation: Correct tax rates at the jurisdiction level (state, county, city, district)
- Filing automation: Prepares and files returns automatically once registered
- Exemption certificate management: Stores and validates resale and exemption certificates
Popular solutions include Avalara, TaxJar, and Vertex. Most integrate directly with major e-commerce platforms and accounting systems.
Key Tracking Considerations
Measurement Period
States use different measurement periods—current calendar year, prior calendar year, trailing 12 months, or "current or prior year." Track against the period each state specifies.
Destination-Based Tracking
Always track based on where products are shipped or services delivered, not where the customer's billing address is located or where your business is based.
Gross vs. Taxable Sales
Some states count only taxable sales toward the threshold; others count all gross sales. Understand each state's specific rules, especially if you sell exempt products.
What to Do When You Trigger Nexus
When your sales exceed a state's economic nexus threshold, you have a series of obligations that must be addressed promptly. Failure to act can result in back taxes, penalties, and interest.
Verify the Threshold Has Been Exceeded
Confirm your data is accurate and that you are measuring against the correct period. Check whether the state uses gross or taxable sales and whether marketplace sales are included.
Register for a Sales Tax Permit
Apply for a sales tax permit with the state's tax authority. Most states require registration within 30-60 days of exceeding the threshold. The Streamlined Sales Tax Registration System allows registration in 24 member states through a single application.
Configure Tax Collection Systems
Update your e-commerce platform, invoicing system, or POS to collect the correct tax rates for the state. Remember that rates vary by jurisdiction—you need to collect state, county, city, and special district taxes where applicable.
Begin Collecting Tax
Start collecting sales tax according to the state's timeline. Some require collection immediately upon exceeding the threshold; others give you until the first of the following month.
File Returns and Remit Tax
Submit sales tax returns according to your assigned filing frequency (monthly, quarterly, or annually). Remit collected tax by the due date to avoid penalties. For detailed guidance on the registration and filing process, see our guide on Sales Tax Registration and Filing.
Voluntary Disclosure Agreements
If you have been selling into a state without collecting tax for an extended period, consider a Voluntary Disclosure Agreement (VDA). Many states offer VDAs that limit look-back periods and waive penalties in exchange for voluntary compliance. This can significantly reduce your exposure.
Compliance Best Practices
Managing nexus thresholds across multiple states requires proactive planning. These best practices help ensure you stay compliant without creating unnecessary administrative burden:
- Set threshold alerts early: Configure alerts at 75% and 90% of each state's threshold. This gives you time to prepare for registration rather than scrambling after the fact.
- Review thresholds quarterly: States periodically change their thresholds. Build in a quarterly review to catch any updates that affect your compliance obligations.
- Document your tracking methodology: Maintain records of how you track and calculate sales by state. This documentation is valuable during audits.
- Consider marketplace sales separately: Understand how each state treats marketplace facilitator sales for threshold calculations. Track direct sales and marketplace sales independently.
- Plan for growth: If you are approaching thresholds in several states simultaneously, consider registering proactively in all of them rather than staggering registrations over several months.
Need Help Managing Multi-State Sales Tax?
Eagle Rock CFO helps growing businesses navigate sales tax nexus, implement compliant tracking systems, and manage multi-state registrations. Our outsourced finance team handles the complexity so you can focus on growth.
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