Sales Tax Nexus Calculator

What changed in 2018 and why you care

For decades, a state could only force you to collect its sales tax if you had physical presence there, meaning an office, a warehouse, or an employee. The 2018 Supreme Court decision in South Dakota v. Wayfair tore that rule up. States can now require an out-of-state seller to collect tax based purely on economic activity, with no physical footprint at all. South Dakota's law set the template most states copied: cross either $100,000 in sales or 200 separate transactions into the state in a year and you have economic nexus. This tool checks your numbers against the thresholds you enter for any given state and tells you whether you have crossed the line.

The stakes are real. Once you have nexus, you are obligated to register with that state's department of revenue, collect tax at the correct local rate, file returns, and remit. Ignore it and the uncollected tax becomes your liability, not the customer's, often with penalties and interest stacked on top.

A seller crossing into one state

Take the defaults: $120,000 of revenue into a state and 350 transactions, checked against a $100,000 revenue threshold and a 200-transaction threshold using the OR operator that most states apply. Revenue clears $100,000, so that test is met. Transactions clear 200, so that test is met too. Because the operator is OR, hitting either one is enough, and the tool returns a clear yes: you must register and collect. Even if your revenue had been only $40,000, the 350 transactions alone would still have triggered nexus in an OR state.

OR states, AND states, and the 200-transaction retreat

Two wrinkles matter. First, a small number of states use AND logic, meaning you must exceed both the revenue and the transaction threshold before nexus attaches; switch the operator on this tool to model those. Second, thresholds are not uniform. Several large states set the revenue bar far higher than $100,000; California and New York, for instance, use $500,000. And a growing number of states have dropped the 200-transaction test entirely after realizing it swept in tiny sellers who shipped many low-dollar orders. Always confirm the current threshold on the specific state's department of revenue page before you rely on a generic figure.

Marketplace sales versus your own checkout

If you sell through Amazon, Etsy, eBay, or Walmart, those platforms are marketplace facilitators and generally collect and remit sales tax on your behalf for sales made through them. Your exposure is the direct-to-customer sales that run through your own website or storefront. A common mistake is counting marketplace orders toward your own nexus tally and then collecting twice, or conversely ignoring your direct sales because the marketplace handles the rest. Track the two channels separately. A practical tip: run this check at the start of each quarter for every state where your direct sales are growing, because nexus is usually measured on a rolling or prior-calendar-year basis and you do not want to discover you crossed a threshold months after the fact.

When do I have to start collecting after crossing the threshold?

Most states give a short grace window, often the start of the next month or the next quarter after you exceed the threshold, to register and begin collecting. A few require collection on the very next transaction. Because the timing varies, register promptly once this tool flags nexus rather than waiting for a notice from the state.

Does nexus apply to services and digital products too?

It can. Whether a service or a digital download is taxable depends on the state, and the rules are inconsistent. Some states tax software-as-a-service and digital goods; others exempt them. The economic nexus threshold still applies to taxable sales, so confirm both whether your product is taxable in that state and whether your volume crosses the line.