What are sales tax economic nexus laws?
State economic nexus laws require that online sellers collect sales tax in that state if certain sales thresholds are met.
For example, “If an online seller, even though they don’t have a physical presence in our state, makes more than $X in sales in our state, or conducts more than X number of transactions in our state, then they are required to collect sales tax from buyers in our state.”
Current state laws on economic nexus vary.
- The sales thresholds vary from $10,000 to $500,000 in sales, and some states don’t have a transaction threshold at all.
- You can read more about economic nexus laws here.