Sales tax nexus is the connection between a seller and a state that lets the state require the seller to register, collect, and remit sales tax, created by physical presence or, since the 2018 Wayfair decision, by economic activity above a threshold.
Economic nexus thresholds are commonly 100,000 dollars in sales or 200 transactions, but they vary by state and change. Marketplace facilitator laws shift collection to platforms for marketplace sales.
Why it matters: an online seller can owe sales tax in a dozen states without an office in any of them, and the exposure accrues silently until an audit.
Read more: sales tax audits.
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Definitions are general information, not legal advice, and may not reflect the most recent changes in law.
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