Sales Tax Nexus

Sales tax nexus is the legal connection between a business and a taxing jurisdiction that obligates the business to collect and remit sales tax in that state. Following the landmark 2018 Supreme Court decision in South Dakota v. Wayfair, Inc., states can establish economic nexus based on a seller's sales volume or transaction count — regardless of physical presence. The most common economic nexus thresholds are $100,000 in gross sales or 200 transactions within a calendar year, though individual states vary significantly. As of 2026, all 45 states with sales tax (plus the District of Columbia) have enacted economic nexus laws, and 30+ states have also adopted marketplace facilitator laws that shift collection responsibility to platforms like Amazon, Shopify, and Etsy for marketplace sales. Nexus analysis is critical for e-commerce businesses, SaaS companies (where taxability varies by state), and any business selling across state lines. Failure to register and collect in states where nexus exists creates accruing use tax liabilities, potential penalties of 5–25% of uncollected tax, and interest charges that compound retroactively. doola and similar compliance platforms help businesses conduct multi-state nexus analysis, file state registrations, and automate ongoing collection and remittance — reducing the compliance burden from 2–5 hours per state per month to near-zero. For a business with $2 million in multi-state revenue, unmanaged nexus exposure across 10 states can represent $80,000–$160,000 in accrued liability plus penalties.