Explaining Nexus Threshold By State

Understanding the intricate web of sales tax nexus thresholds is key for businesses navigating the complexities of state taxation laws. As the digital age continues to reshape traditional business models, the concept of nexus—the connection between a business and a taxing jurisdiction—has become a focal point in determining tax obligations. Nexus can be created by physical presence (i.e.; employees or contractors in a state, an office, or inventory) or economic .

The table below aims to shed light on the diverse nexus thresholds established by individual states across the United States when determining economic nexus for sales tax. Each state presents its own set of criteria that trigger nexus for sales, income, and other tax purposes. By delineating these thresholds, businesses can proactively strategize their operations to ensure compliance and mitigate potential liabilities.

As a business operating in one, or many, of these states, its truly vital that you have clear knowledge of their tax regulations and nexus thresholds.

Things can get a little messy in these matters, so consult the below table, consider your individual fact pattern and then come to Miles Consulting  – we’ll help you understand your unique tax challenges, whatever state you’re in. Our professionals can help with sales tax compliance (filing returns when and where you need to), retroactive remediation, merger and acquisition due diligence, and audit support, among others.

We start most conversations with clients by talking about nexus because that determination is the starting point of a relationship with a state and its taxing authority. Once nexus is established, a company has an obligation to then determine if its products and services sold to customers in that state are subject to sales tax, whether there are relevant exemptions, and then their requirements to file sales tax returns. Nexus is just the first step in the process of becoming compliant.

The chart below is a great starting point…and then we can help you apply it to your situation. Contact us for a conversation about your situation and how we can help.

Book a consultation with Miles Consulting, drop us a line, or send us an email at info@milesconsultinggroup.com.

Economic Nexus Threshold for Sales Tax
           
State Effective date Economic nexus threshold Time period the threshold is based on Inclusions/exclusions from the remote seller’s threshold calculation Is registration required if all sales are marketplace sales?
Alabama 10/1/2018 Monetary: $250,000 Transaction: N/A Previous calendar year Type of sales to include: Retail sales Sales through a marketplace: Exclude
Sales for resale: Exclude
Exempt sales: Include
No
Alaska 4/1/2020 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Arizona 10/1/2019 Monetary: 10/1/2019 $200,000 1/1/2020 $150,000 1/1/2021 $100,000 Transaction: N/A Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Exclude Sales for resale: Include No
Arkansas 7/1/2019 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: The sale of TPP, taxable services, a digital code, or specified digital products
Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Exclude
No
California 4/1/2019 Monetary: 4/1/2019 $100,000 4/26/2019 $500,000 Transaction: N/A Previous or current calendar year Type of sales to include: Total combined sales of TPP Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Colorado 6/1/2019 Monetary: $100,000 Transaction: N/A Previous or current calendar year Type of sales to include: Retail sales Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Include
No
Connecticut 12/1/2018 Monetary: 12/1/2018 $250,000 7/1/2019 100,000 AND Transaction: 200 12-month period ending on September 30th Type of sales to include: Monetary portion of the threshold: gross sales AND Transaction portion of the threshold: retail sales Sales through a marketplace: Include for both monetary and transaction portion Sales for resale: Exclude for transaction portion, but include for monetary portion Exempt sales: Include for both monetary and transaction portion Yes
District of Columbia 1/1/2019 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Retail sales Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Include
No
Florida 7/1/2021 Monetary: $100,000 Transaction: N/A Previous calendar year Type of sales to include: Retail sales of TPP
Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Exclude
No
Georgia 1/1/2019 Monetary: 1/1/2019 $250,000 1/1/2020 $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Retail sales of TPP
Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Include
No
Hawaii 7/1/2018 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Gross sales of TPP, services, and intangibles
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
Yes
Idaho 6/1/2019 Monetary: $100,000 Transaction: N/A Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Illinois 10/1/2018 Monetary: $100,000 OR Transaction: 200 Prior 12 months Type of sales to include: Gross sales of TPP
Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Include
Indiana 10/1/2018 Monetary: $100,000

Transaction:
10 /1/2018 200 1/1/2024 N/A

Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Exclude Sales for resale: Include
Exempt sales: Include
No
Iowa 1/1/2019 Monetary: $100,000 Transaction: 1/1/2019 200 7/1/2019 N/A Previous or current calendar year Type of sales to include: Gross revenue from sales of TPP, services, or specified digital products
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Kansas 7/1/2021 Monetary: $100,000 Transaction: N/A Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Kentucky 10/1/2018 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Louisiana 7/1/2020 Monetary: $100,000 Previous or current calendar year Type of sales to include: Gross sales of TPP
Sales through a marketplace: Exclude Sales for resale: Include
Exempt sales: Include
No
Maine 7/1/2018 Monetary: $100,000 Transaction: 7/1/2018 200 1/1/2022 N/A Previous or current calendar year Type of sales to include: The sale of TPP, products transferred electronically, or taxable services
Sales through a marketplace: Exclude Sales for resale: Include
Exempt sales: Include
Yes
Maryland 10/1/2018 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: The sale of TPP and/or taxable services
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Massachusetts 10/1/2019 Monetary: $100,000 Transaction: N/A Previous or current calendar year Type of sales to include: Gross sales of TPP and/or services Sales through a marketplace: Exclude Sales for resale: Include
Exempt sales: Include
No
Michigan 10/1/2018 Monetary: $100,000 OR Transaction: 200 Previous calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Minnesota 10/1/2018 Monetary: $100,000 OR Transaction: 10/1/2018 100 10/1/2019 200 Prior 12 Months Type of sales to include: Retail sales Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Include
No
Mississippi 9/1/2018 Monetary: $250,000 Transaction: N/A Prior 12 Months Type of sales to include: Total sales Sales through a marketplace: Exclude Sales for resale: Include
Exempt sales: Include
No
Missouri 1/1/2023 Monetary: $100,000 Transaction: N/A Previous or current calendar year Type of sales to include: All sales of tangible personal property
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
Nebraska 4/1/2019 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Retail sales Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Include
Yes
Nevada 10/1/2018 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Retail sales Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Include
Yes
New Jersey 11/1/2018 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Gross revenue from sales of tangible personal property, specified digital products, or taxable services
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
New Mexico 7/1/2019 Monetary: $100,000 Transaction: N/A Previous calendar year Type of sales to include: Taxable gross receipts
Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Exclude
Yes
New York 6/21/2018 Monetary: 6/21/2018 $300,000 6/24/2019 $500,000 AND Transaction: 100 Prior four quarters

 

Type of sales to include: Sales of TPP Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
Yes
North Carolina 11/1/2018 Monetary: $100,000 OR Transaction: 200 Previous or current calendar yea Type of sales to include: All sales of TPP, digital property, and services
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
North Dakota 10/1/2018 Monetary: $100,000 Transaction: 2018 200 2019 N/A Previous or current calendar yea Type of sales to include: The sales of TPP and other taxable items delivered in this state
Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Exclude
No
Ohio 8/1/2019 Monetary: $100,000 OR Transaction: 200 Previous or current calendar yea Type of sales to include: Retail sales Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Include
No
Oklahoma 7/1/2018 Monetary: 7/1/2018 $10,000 11/1/2019 $100,00 Transaction: N/A Previous calendar year Type of sales to include: Taxable sales Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Exclude
No
Pennsylvania 7/1/2019 Monetary: $100,000 Transaction: N/A Previous Pennsylvania fiscal calendar year – beginning on April 1st Type of sales to include: Gross sales Sales through a marketplace: Exclude Sales for resale: Include
Exempt sales: Include
No
Rhode Island 7/1/2019 Monetary: $100,000 OR Transaction: 200 Previous calendar year Type of sales to include: Gross revenue from the sale of TPP, prewritten computer software delivered electronically or by load and leave, vendor-hosted prewritten computer software, and/or taxable services delivered into the state
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
South Carolina 11/1/2018 Monetary: $100,000 Transaction: N/A Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
South Dakota 11/1/2018 Monetary: $100,000 OR Transaction: 200 (Transaction threshold to be removed 7/1/23) Previous or current calendar year Type of sales to include: Gross sales of TPP, any products or services transferred electronically
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Tennessee 7/1/2019 Monetary: 10/1/2019 $500,000 10/1/2020 $100,000 Transaction: N/A Prior 12 months Type of sales to include: Retail sales Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Include
No
Texas 10/1/2019 Monetary: $500,000 Transaction: N/A Prior 12 months Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Utah 1/1/2019 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Exclude Sales for resale: Include
Exempt sales: Include
No
Vermont 7/1/2018 Monetary: $100,000 OR Transaction: 200 Prior 12 months Type of sales to include: Gross sales
Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Virginia 7/1/2019 Monetary: $100,000 OR Transaction: 200 Previous or current calendar year Type of sales to include: Retail sales Sales through a marketplace: Exclude Sales for resale: Exclude
Exempt sales: Include
No
Washington 10/1/2018 Monetary: $100,000 Transaction: 2018 200 2020 N/A Previous or current calendar year Type of sales to include: Retail sales Sales through a marketplace: Include Sales for resale: Exclude
Exempt sales: Include
No
West Virginia 1/1/2019 Monetary: $100,000 OR Transaction: 200 Previous calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Wisconsin 10/1/2018 Monetary: $100,000 Transaction: 10/1/2018 200 2/20/2021 N/A Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No
Wyoming 2/1/2019 Monetary: $100,000 OR Transaction: 2/1/2019 200 7/1/2024 N/A Previous or current calendar year Type of sales to include: Gross sales Sales through a marketplace: Include Sales for resale: Include
Exempt sales: Include
No

 

 Have a question? Contact Monika Miles, Miles Consulting Group.