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Since 2018, states have been able to require out-of-state sellers to collect sales tax once they pass an economic threshold, typically $100,000 in sales or a set number of transactions. Nearly every state with a sales tax now has such a rule.
How nexus sneaks up on you
Thresholds are measured on a rolling or calendar-year basis and vary by state. A seller with steady growth can cross thresholds in several states in a single year without any change in operations. Marketplace facilitator laws help because Amazon or Etsy collects on your behalf, but direct sales through your own site usually remain your responsibility.
What to do
- Track sales by ship-to state every month
- Register before you cross a threshold, not after
- Configure your checkout to calculate tax by destination
- File on the schedule each state assigns, even for zero returns
- Keep exemption certificates for wholesale customers
If you're already behind
Most states offer voluntary disclosure programs that limit lookback periods and waive penalties. It is almost always cheaper to come forward than to be found.
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