Forty-five states plus the District of Columbia (DC) each set their own economic nexus threshold for sales tax. An online seller can owe tax in a state they have never visited, triggered by sales volume alone. Cross a threshold and you must register, collect, and remit, or face penalties and interest.
This guide explains when, where, and how thresholds are measured. Every figure is checked against the Sales Tax Institute economic nexus chart and state revenue departments, current as of July 2026.
What Are Sales Tax Thresholds?
Sales tax thresholds are state-set levels of sales revenue or transaction count that trigger a remote seller’s duty to register and collect. The most common benchmark is $100,000 in sales, measured over the current or prior calendar year, per the Sales Tax Institute. The exact number, measurement window, and definition of includable sales vary by state.
What Are the Sales Tax Thresholds by State in 2026?
Most states use a $100,000 sales threshold. The outliers matter: Alabama sets $250,000 in retail sales, and California, Texas, and New York use $500,000. New York uniquely also requires 100 transactions. The table below shows thresholds, measurement periods, and marketplace treatment, verified against the Sales Tax Institute chart and state departments of revenue (DORs) as of July 2026.
| State | Effective date | Threshold | Measurement period | Includable sales | Marketplace sales in seller’s count | Source |
|---|---|---|---|---|---|---|
| Alabama | Oct 1, 2018 | $250,000 | Previous calendar year | Retail | Excluded | Sales Tax Institute |
| California | Apr 1, 2019 | $500,000 (no transaction count) | Current or preceding calendar year | Total | Included | Sales Tax Institute |
| Texas | Oct 1, 2019 | $500,000 (no transaction count) | Preceding 12 months | Total | Included | Sales Tax Institute |
| New York | Jun 21, 2018 | $500,000 AND 100 transactions | Preceding four quarters | Gross | Included | NY Dept. of Taxation |
| Connecticut | Dec 1, 2018 | $100,000 AND 200 transactions | 12 months ending Sept 30 | Retail | Included | Sales Tax Institute |
| South Dakota | Nov 1, 2018 | $100,000 (no transaction count) | Current or previous calendar year | Gross | Included | South Dakota DOR |
| Florida | Jul 1, 2021 | $100,000 | Previous calendar year | Taxable | Excluded | Sales Tax Institute |
| Georgia | Jan 1, 2020 | $100,000 OR 200 transactions | Current or previous calendar year | Retail | Included | Sales Tax Institute |
| Illinois | Oct 1, 2018 | $100,000 OR 200 transactions (200 count ends Jan 1, 2026) | Preceding 12 months | Gross | Included | Sales Tax Institute |
| Washington | Oct 1, 2018 | $100,000 | Current or prior calendar year | Retail | Included | Sales Tax Institute |
| Colorado | Jun 1, 2019 | $100,000 | Current or previous calendar year | Retail | Included | Sales Tax Institute |
| Ohio | Aug 1, 2019 | $100,000 | Current or preceding calendar year | Gross | Included | Sales Tax Institute |
| New Jersey | Nov 1, 2018 | $100,000 OR 200 transactions | Current or prior calendar year | Gross | Included | Sales Tax Institute |
| Pennsylvania | Jul 1, 2019 | $100,000 | Previous 12 months | Gross | Included | Sales Tax Institute |
| Michigan | Oct 1, 2018 | $100,000 OR 200 transactions | Previous calendar year | Gross | Included | Sales Tax Institute |
Five states levy no statewide sales tax and set no statewide economic nexus threshold: Delaware, Montana, New Hampshire, Oregon, and Alaska. Alaska has no state tax, but local jurisdictions collect through the Alaska Remote Seller Sales Tax Commission, which applies a roughly $100,000 threshold, per the Sales Tax Institute.
Thresholds change often. For a live, state-by-state reference, see Commenda’s US nexus exposure guide.
What Is the Difference Between Economic Nexus and Physical Nexus?
Economic nexus is triggered by sales crossing a state’s threshold, with no presence required. Physical nexus is triggered immediately by tangible presence: an office, employees, or inventory. Physical nexus has no threshold. One warehouse creates an obligation regardless of sales volume.
You can have nexus through either route. So the common question, “do I collect if I am under the threshold,” has one answer: yes, if you have physical presence. Inventory stored in a state through Fulfillment by Amazon (FBA) or a third-party logistics (3PL) provider counts, even if you never visit. Read more in Commenda’s guide to physical nexus for sales tax.
What Did South Dakota v. Wayfair Change for Online Sellers?
The Supreme Court’s June 21, 2018 decision in South Dakota v. Wayfair, Inc. let states require sellers with no physical presence to collect sales tax. It overturned the physical-presence rule of Quill Corp. v. North Dakota (1992). South Dakota’s $100,000 or 200-transaction law became the template most states copied.
The Court cited e-commerce scale: about $180 million in national mail-order sales around the 1992 Quill era versus $453.5 billion in US e-commerce sales in 2017, per the Supreme Court opinion. Before Wayfair, California taxed only sellers with physical presence. After, it set a $500,000 threshold effective April 2019, with no transaction count, per the Sales Tax Institute.
Is the 200-Transaction Threshold Disappearing?
Yes. States have repealed the transaction count since 2018 and kept only the dollar threshold. The reason: 200 sales of $10 items created nexus on just $2,000 of revenue, which burdened small sellers. The table below tracks states that dropped the count, with effective dates.
| State | Transaction count repealed | Source |
|---|---|---|
| North Dakota | Dec 31, 2018 | Sales Tax Institute |
| Washington | Mar 14, 2019 | Sales Tax Institute |
| Colorado | Apr 14, 2019 | Sales Tax Institute |
| Iowa | May 3, 2019 | Sales Tax Institute |
| Ohio | Aug 1, 2019 | Sales Tax Institute |
| Wisconsin | Feb 20, 2021 | Sales Tax Institute |
| Maine | Jan 1, 2022 | Sales Tax Institute |
| Louisiana | Aug 1, 2023 | Sales Tax Institute |
| South Dakota | Jul 1, 2023 | South Dakota DOR |
| Indiana | Jan 1, 2024 | Indiana DOR (Bulletin #89) |
| Wyoming | Jul 1, 2024 | Wyoming HB 197 |
| North Carolina | Jul 1, 2024 | NCDOR Directive SD-24-1 |
| Alaska | Jan 1, 2025 | Sales Tax Institute |
| Utah | Jul 1, 2025 | Sales Tax Institute |
| Illinois | Jan 1, 2026 | Sales Tax Institute |
| Kentucky | Aug 1, 2026 | Sales Tax Institute |
Do Sales Tax Thresholds Count Total Sales or Taxable Sales?
It depends on the state. Thresholds are measured against gross, retail, or taxable sales, and those are three different numbers, per the Sales Tax Institute. Gross includes everything, even resale and exempt sales. Retail excludes resale. Taxable excludes all non-taxable sales. The measure you use changes whether you have crossed.
Say your business makes $100,000 in total sales into a state, but only $80,000 of that is taxable. In a gross-sales state you have crossed the $100,000 line. In a taxable-sales state you have not. Using the wrong measure causes over-registration or a missed obligation.
How Do Marketplace Sales Count Toward Nexus Thresholds?
All sales-tax states now have marketplace facilitator laws, so platforms like Amazon, eBay, Etsy, and Walmart collect and remit on the seller’s behalf. States differ on whether those sales count toward your own threshold. Alabama excludes marketplace sales from the seller’s count, per the Sales Tax Institute; many states include them.
Marketplace-only sellers may still need to register and file returns, including zero-dollar returns, in some states. If you sell on both a marketplace and your own site, track includable sales separately, because the marketplace portion may or may not count toward your direct-sales nexus. Selling on Shopify? See Commenda’s list of the best sales tax apps for Shopify.
Do International and Remote Sellers Need to Collect US Sales Tax?
Yes. Economic nexus thresholds apply to any seller shipping to US customers, including foreign businesses with no US presence. Crossing a state’s threshold obligates you to register, collect, and file, exactly as a domestic seller must. There is no exemption for being based abroad.
Non-compliance is costly. States assess back taxes, penalties, and interest on uncollected sales tax, and undiscovered liability can carry an unlimited look-back period in some states. Staying registered and current is far cheaper than remediation.
How Do You Track Economic Nexus Thresholds Across States?
Track rolling, state-by-state sales and transaction counts against each state’s threshold and measurement period. A year-end sales surge can create an obligation mid-quarter. Pull sales by ship-to state from your platforms, separate direct sales from marketplace-facilitated sales, and re-check monthly.
Manual spreadsheets break down past a few states. Automated monitoring is the scalable answer. Commenda’s indirect tax platform monitors physical and economic nexus across every state and connects to 100+ enterprise resource planning (ERP) systems, application programming interfaces (APIs), and custom integrations; see the full list on the Commenda integrations page. For the practical next step, compare sales tax software for ecommerce businesses.
What Should You Do After Exceeding a Nexus Threshold?
Register for a sales tax permit with the state’s department of revenue (DOR), then collect at the correct rates, then file and remit on the state-assigned frequency. Timing varies; some states require registration by your next transaction. You register only where you have economic or physical nexus, not in every state.
Some states also require prepayments from registered high-liability filers, typically monthly or quarterly, on top of regular returns. California’s Department of Tax and Fee Administration (CDTFA) publishes such a prepayment schedule. Prepayments follow registration and your assigned filing frequency. They are not owed before you cross a threshold. For multi-state programs, see Commenda’s guide to sales tax compliance for multi-state businesses.
How Commenda Helps With Sales Tax Threshold Compliance
Commenda’s global indirect tax software tracks your physical and economic nexus exposure across every state, handles registration, and manages multi-state filing and remittance. For threshold checks, use the evergreen US nexus exposure guide, kept current as state rules change. For rates at checkout, the sales tax calculator looks up the correct rate by address; it does not check nexus exposure.
Book a demo to get a free nexus exposure assessment across every state you sell into: book a demo with Commenda.
