Most states set their remote seller economic nexus threshold at $100,000 in sales into the state over the current or previous calendar year, and once you cross that line you generally have until the first day of the second month afterward to register and start collecting. A handful of states set the bar higher, at $500,000, and a smaller number use different measurements. Every state that imposes a sales tax now has some version of this rule, following the Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc.1Legal Information Institute. South Dakota v. Wayfair, Inc.
The $100,000 Baseline and Its Variants
The South Dakota law the Supreme Court upheld used $100,000 in sales or 200 separate transactions as its triggers, and most states copied that framework when they wrote their own rules. Deviations run in both directions. Some states set the dollar threshold at $500,000, focusing enforcement on higher-volume sellers. At least one state starts at $250,000 in tangible personal property sales with no transaction count at all.2Streamlined Sales Tax Governing Board. Remote Seller State Guidance
Five states impose no general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. You do not need a sales tax permit for those states. Alaska is the exception worth flagging. It has no statewide sales tax, but its local governments levy their own, and those local jurisdictions have adopted economic nexus rules through a remote seller sales tax commission.
The 200-transaction prong is disappearing. As of 2026, at least 16 states have dropped their transaction-count trigger entirely, leaving only the dollar threshold. That number has roughly doubled since 2023. The reasoning is practical: a seller could hit 200 orders of $5 items and generate almost no tax revenue while facing the full compliance burden of registration and filing. If your reference material still lists a 200-transaction threshold for a given state, verify it against the state’s current rules before relying on it.
Which Sales Count Toward the Threshold
This is where remote sellers most often miscalculate. The definition of what counts varies by state:
- Gross sales: all revenue from transactions shipped into the state counts, including wholesale sales, sales to tax-exempt buyers, and sales of nontaxable products. Exemption status is irrelevant to the nexus calculation.
- Retail sales: sales for resale are excluded, but sales of exempt products (like groceries in states that exempt food) still count because they are retail transactions.
- Taxable sales: only transactions that actually generate tax liability count. Sales covered by an exemption certificate or a product exemption are excluded.
Most states use a gross-sales or retail-sales threshold, which means exempt sales usually push you closer to the trigger even though you won’t collect tax on them.3Streamlined Sales Tax Governing Board. Remote Seller Thresholds Terms Sellers who assume only taxable sales matter often discover they crossed the threshold months earlier.
Measurement Periods
States also define the window over which sales are measured, and the two approaches produce different compliance rhythms. The more common one uses the previous or current calendar year: if your sales from January 1 through December 31 last year exceeded the threshold, you have a collection obligation this year, and if you cross the threshold mid-year, the obligation kicks in for the remainder of that year.2Streamlined Sales Tax Governing Board. Remote Seller State Guidance
Roughly nine states use a rolling 12-month period instead. That requires checking your trailing 12-month total at the end of each month or quarter. The window shifts constantly, and you could cross during any month rather than only at year-end. States on this model typically evaluate the preceding 12 months ending on the last day of each calendar quarter.
Digital Goods, SaaS, and Marketplace Sales
Whether software-as-a-service subscriptions, digital downloads, and streaming access count depends on the state’s tax base. Roughly half of U.S. taxing jurisdictions treat SaaS as taxable in some form; the other half do not. The same product might count toward your nexus calculation in one state and be invisible in another, so a state-by-state determination is unavoidable if you sell digital goods.
Marketplace sales split the same way. About 20 states exclude sales made through a marketplace facilitator from the seller’s own threshold, reasoning that the marketplace already handles collection. The rest count those sales toward your threshold even though you never touched the tax. Check each state individually. The answer is not consistent.
When Collection Begins and How to Register
Once you cross a threshold, the clock starts. Most states give you until the first day of the second month after the month you exceeded the limit. Cross $100,000 into a state during March, and collection typically begins on May 1. The exact deadline varies, but two months is the most common grace period.
Registration runs through the state’s revenue department, usually via an online portal. You provide your federal employer identification number, ownership details, and an estimate of future taxable sales. Most states charge nothing for the permit application, though a few impose small fees, and some may require a refundable security deposit for new registrants.
After registration, you collect tax on every taxable sale shipped to customers in that state, then file returns and remit the collected tax on a schedule the state assigns. Filing frequency (monthly, quarterly, or annually) is based on expected tax liability and can change as your sales volume grows.
Marketplace Facilitator Relief
Every state with a sales tax has adopted marketplace facilitator legislation, and this is the single largest simplification for sellers who operate through platforms. Under these laws, the marketplace (Amazon, Walmart Marketplace, Etsy, eBay) is legally responsible for collecting, reporting, and remitting sales tax on transactions it facilitates. The individual seller is generally relieved of that obligation for those sales.
The relief has limits. Direct sales through your own website are entirely your responsibility. If the marketplace fails to collect the correct amount, some states may look to the seller as a backstop. Practically: if all your sales flow through a single registered marketplace, your compliance burden is dramatically lower. Add a direct channel (a Shopify store, phone orders, in-person sales at a trade show) and you need your own permit in every state where those direct sales cross the threshold.
Streamlined Sales Tax as a Shortcut
The Streamlined Sales Tax Agreement is a multi-state compact designed to reduce the administrative pain of collecting in many states at once. Currently 23 states are full members.4Streamlined Sales Tax Governing Board. FAQs – Information About Streamlined The concrete benefits for remote sellers:
- Single registration through a centralized electronic system, with member states selected on the same form.
- Unified filing so returns and payments to all participating jurisdictions run through one location, with the state distributing local taxes.
- Free tax software through a Certified Service Provider that handles calculation, filing, and remittance. For qualifying sellers, CSP services are provided at no charge and the member states compensate the provider directly.5Streamlined Sales Tax Governing Board. Certified Service Providers About
- Free rate and boundary databases down to the ZIP-code level. If you charge the wrong rate because you relied on the state’s official database, the state holds you harmless.4Streamlined Sales Tax Governing Board. FAQs – Information About Streamlined
- Businesses using certified software are generally immune from audit liability for sales processed through that software, and local jurisdictions typically cannot conduct separate audits.
SST does not cover every state, and several large markets with complex local tax structures are not members. But for member states, it eliminates a significant share of the busy work.
Home-Rule Local Jurisdictions
In most states, registering with the state revenue department covers every local jurisdiction inside that state. The state collects local taxes on your behalf and distributes them. A handful of states allow self-governing home-rule cities to administer their own sales taxes independently. Those cities may set their own tax bases, rates, and even their own economic nexus thresholds.
So registering with the state is not always enough. You may need to register separately with individual cities, track their rates independently, and file returns directly with each one. One state’s model ordinance for home-rule municipalities sets the local threshold at $100,000 in annual sales into the state (not into that specific city), but not all cities adopt the model and some differ in their definitions or filing requirements. If you have significant sales into a state with self-collecting local jurisdictions, contact those cities directly rather than assuming state-level registration covers you.
If You Already Crossed a Threshold Years Ago
If you’ve been selling into a state for years without collecting tax and only now realize you crossed the threshold long ago, a voluntary disclosure agreement is usually the best option. The Multistate Tax Commission runs a program that lets businesses come forward, register, and settle back-tax liability under negotiated terms.6Multistate Tax Commission. Multistate Voluntary Disclosure Program
The trade-off: you agree to file returns and pay taxes owed for a defined lookback period, and the state waives penalties. Interest on unpaid taxes is usually still owed unless the state specifically waives it. The lookback period in most participating states is 36 months.7Multistate Tax Commission. Lookback Periods for States Participating in National Nexus Program Some states extend that to 48 months, and one goes to 60. Without an agreement, the state can audit further back (often seven or eight years) and assess the full penalty on top of the tax and interest.
One critical eligibility rule: you cannot have already been contacted by the state about the tax in question. If the state has sent you a notice, opened an audit, or otherwise reached out, voluntary disclosure is off the table for that tax type. Some states also run periodic amnesty programs that temporarily offer broader relief, including interest waivers.8Multistate Tax Commission. State Tax Amnesties
Waiting until the state finds you costs more on every axis. The obligation is treated as if it began the moment you crossed the threshold, whether or not you collected anything from your customers, so the liability comes out of your pocket rather than theirs. Penalties, interest from each return’s original due date, and in some states additional penalties for failing to register all stack on top. One state’s standard penalty for sellers discovered through audit runs as high as 39% of the tax due, plus interest, with a seven-year lookback. That is an outlier, but it shows how the numbers move when a business ignores its obligations for several years.