Economic Nexus

Economic nexus refers to a business's tax obligation in a state based on its sales revenue, transaction volume, or other economic activity within that state, even if the business has no physical presence there. (Remote sellers are also required to collect and remit sales tax once they exceed specific economic thresholds)

Each state sets its own economic nexus thresholds, typically based on:

• Total sales revenue (e.g., $100,000 in sales within the state)
• Number of transactions (e.g., 200 or more transactions in the state)

If your business meets or exceeds these thresholds in a state, you are legally required to register, collect, and remit sales tax there.