Sales tax

Sales tax nexus

Sales tax nexus is the connection between a business and a state that gives the state the right to require the business to collect and remit sales tax. It can come from a physical presence, such as an office or employee, or from the state's economic nexus threshold.

Reviewed November 3, 2026

Why it matters

A business that crosses a state's threshold without registering can owe back tax, penalty and interest. The review of sales by state is the first step before a registration or a voluntary disclosure.

Example

An online seller has no office in another state but its sales there cross the state's economic nexus threshold. The seller may need to register, collect the tax and file a return in that state.

Related terms

Questions about Sales tax nexus

What is economic nexus?

Economic nexus is a connection based on sales or transaction volume rather than a physical presence. The threshold differs by state, and some states count transactions as well as dollars.

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Sources

Checked November 3, 2026. Public pages and tax rules change; confirm them before relying on them.

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