US economic nexus: what actually triggers it, state by state

Where the $100,000 rule comes from

Before 2018 a state could only tax a seller with physical presence there. In South Dakota v. Wayfair, the Supreme Court held that physical presence was not required, and upheld the South Dakota statute in front of it — which set its threshold at $100,000 in sales or 200 separate transactions.

That figure entered common knowledge as the economic nexus rule. It was never that. It was one state's statute, upheld as constitutional, and every other state was then free to write its own — which is what they did.

How many states it actually describes

The dollar figure is the part that mostly holds: 43 of the 48 sit at $100,000. It is the transaction count that has quietly disappeared. 29 jurisdictions have no transaction test at all — dollar volume is the only thing that can trigger registration.

The practical effect runs one way: a low-value, high-volume seller who once crossed on transaction count alone may now be below the line in states that dropped the test, while a seller who ignores the dollar figure because "I only had 40 orders" is exposed in 29 of them.

Fourteen different windows

Across the 48 jurisdictions there are 14 distinct measurement periods. Some look at the previous calendar year. Some look at the previous or the current one, which means a good quarter can put you over mid-year. Some run a rolling twelve months that moves every day.

Illinois reviews a preceding twelve-month period quarterly. Tennessee runs a trailing twelve months. Connecticut measures the twelve months ending 30 September — a date with no relationship to your financial year, your quarter ends, or anyone else's rule.

Why "previous or current year" is the trap

It is the most common wording — 30 of the 48 use it — and it is the one people misread. It does not mean you are safe until next January. It means the moment your current-year sales pass the figure, the obligation begins, mid-quarter and without warning.

Gross sales, and B2B counts

US economic nexus tests gross sales into the state, not taxable sales and not consumer sales. A sale to a business with a valid resale certificate may end up exempt from tax — but in most states it still counts toward the threshold that decides whether you must register.

This is the sharpest difference from the EU, where the OSS threshold measures cross-border B2C supplies and business customers fall outside it entirely. A seller who reasons from European rules will undercount their US exposure.

Marketplace orders

Every state with economic nexus also has a marketplace facilitator law making the marketplace collect on sales it processes. Whether those orders still count toward your threshold varies by state — some exclude them, some include them in the measurement even though the marketplace remits the tax.

In the weeks after

1. 1Fix the date you crossedNot the date you noticed. Every downstream question — when collection starts, how much is owed, whether a voluntary disclosure is worth it — is answered from that date.
2. 2Read the state's own start ruleSome states begin the obligation immediately; others give you until the first day of the next month or quarter. This is stated on the department of revenue page linked from every threshold page on this site.
3. 3Register before you collectCollecting sales tax without a permit is its own violation in most states, separate from failing to collect. Register first, then switch collection on.
4. 4Decide how to handle the gapIf you crossed months ago, the exposure is the tax you should have charged since. Most states run a voluntary disclosure programme that limits the look-back and usually waives penalties. It is a conversation for an advisor in that state, and it is materially cheaper before they contact you.