Economic Nexus - What It Is and Why It Matters

Understanding Your Sales Tax Obligations in the Post-Wayfair Era:

If your business sells products or services across state lines — whether through an e-commerce platform, remote sales, or even wholesale channels — economic nexus laws could have a major impact on your sales tax obligations.

Economic nexus refers to a sales tax obligation that is created when a business exceeds a specific amount of sales or transactions into a state, even if the business has no physical presence there.

This concept was solidified by the 2018 U.S. Supreme Court decision in South Dakota v. Wayfair, Inc., which gave states the authority to require out-of-state sellers to collect and remit sales tax once they meet certain economic thresholds.

 Most states with economic nexus laws set thresholds like:

• $100,000 or more in gross sales into the state, OR 
• 200 or more separate transactions shipped into the state annually 

However, thresholds vary widely by state — and some have removed the transaction count altogether. It's critical to monitor your sales activity to stay compliant.

Economic nexus applies to:

• E-commerce sellers shipping goods to multiple states 
• Remote sellers without physical locations but with significant sales volume 
• Marketplace sellers, depending on state rules and facilitator laws 
• Wholesalers or B2B sellers with digital ordering systems or widespread customer bases 

 If you meet a state's economic nexus threshold, you are generally required to:

1. Register for a sales tax permit in that state 
2. Collect and remit sales tax on taxable sales shipped to customers in that state 
3. File periodic sales tax returns, even if your sales later fall below the threshold 

Failure to comply can result in penalties, interest, and even audits from state tax authorities.

At Tax License Pro, we specialize in helping businesses determine where they have economic nexus and ensuring you're registered properly in every required state. Our services include:

Economic Nexus Studies to analyze where you have triggered nexus Sales Tax Registration Services in all US states Online Account Setup and Guidance to ensure you're ready to collect and remit

Let us do the heavy lifting. Our team will evaluate your sales data, identify your nexus footprint, and walk you through the steps to become compliant — all with fast turnaround and expert support.

to schedule your free Economic Nexus consultation.