Sales tax nexus calculator: economic nexus by state

Other ways to calculate sales tax nexus

Sales only

nexus = sales ≥ threshold

Most states now, including California, Texas, Florida, Illinois and Kentucky, which have dropped their transaction tests.

Sales or transactions

nexus = sales ≥ $100,000 OR transactions ≥ 200

States that still count orders, such as Georgia, Michigan, New Jersey, Ohio and Virginia. Many small orders can trigger nexus before the dollar test does.

Sales and transactions

nexus = sales ≥ threshold AND transactions ≥ count

Connecticut ($100,000 and 200) and New York (more than $500,000 and more than 100). Both tests have to be met.

Gross vs. retail vs. taxable sales

sales counted = gross, or minus resale, or minus exempt sales

Read the state's 'what counts' column. A store selling mostly exempt goods (clothing in some states, groceries) may cross a gross-sales test but not a taxable-sales one.

What is sales tax nexus?

Sales tax nexus is the connection with a state that obliges a seller to collect that state's sales tax. Having an office, staff or inventory there creates physical nexus. Since the Supreme Court's 2018 South Dakota v. Wayfair decision, selling enough into a state creates economic nexus too, even with nothing physically there.

Every state with a sales tax now has an economic nexus threshold for remote sellers. The threshold is a dollar amount of sales, sometimes with a count of transactions, measured over a set period.

How to check whether you have nexus

• Export sales by ship-to state. A sales-by-region report pastes straight into the calculator above. Use the measurement period each state uses: most look at the current or previous calendar year; Texas, Tennessee and Pennsylvania look at the previous 12 months.
• Use the sales the state counts. Most count gross sales, some only retail or taxable sales. Several include sales made through marketplaces like Amazon in the total.
• Count transactions where it matters. Only states that still have a transaction test need the order count.
• Compare each state to its threshold. Once you cross one, register before you collect, then collect from the date the state sets.

How to calculate sales tax nexus: a worked example

A store sold $120,000 in 900 orders into Arkansas, $610,000 in 4,100 orders into Texas and $80,000 in 240 orders into New York over the last 12 months.

• Arkansas: $100,000 or 200 transactions. $120,000 ≥ $100,000, so nexus
• Texas: $500,000 in sales. $610,000 ≥ $500,000, so nexus
• New York: more than $500,000 and more than 100 transactions. 240 orders pass, but $80,000 is only 16% of the sales test, so no nexus

The store registers in Arkansas and Texas and collects there; New York stays on the watch list.

What to do once you cross a threshold

Register before you collect. Collecting sales tax without a permit isn't allowed. Most states give you a short window, often the first day of the next month or quarter, after you cross.

Turn on collection for that state only. Shopify and most platforms collect per state once you add the registration. Keep the rates current; local rates change several times a year.

If you crossed a while ago, many states offer a voluntary disclosure agreement that limits back tax and waives penalties. This page is an estimate, not tax advice; a sales tax professional can tell you what you owe.