Economic Nexus Insights
Our Economic Nexus Insights feature eliminates the guesswork in determining where you already have nexus and where you’re approaching nexus.
This feature allows you to monitor your economic nexus status, enabling you to register proactively and collect sales tax correctly, ensuring compliance from day one. To achieve the best results from this tool, we recommend importing your historical sales data from the current and previous calendar year. This data is what TaxJar will review to determine where you may need to register for economic nexus.
The Economic Nexus Insights dashboard visually shows you:
- The states where you may currently have reached economic nexus thresholds
- The states where you may be approaching economic nexus thresholds
- The states where your sales have met the current economic nexus thresholds
- How you are tracking against those threshold requirements
States will begin displaying on your Economic Nexus Insights dashboard once you've reached 75% of a particular state's threshold requirements.
As a reminder, physical presence still creates nexus: If you have a physical presence in a state (employees, office, inventory in a warehouse, etc.), you're still expected to collect and remit sales tax in that state, regardless of whether you meet a state's economic nexus threshold.
Economic Nexus Insights Notifications
In addition to the Economic Nexus Insights dashboard, this feature automatically sends email notifications when:
- Your business is approaching economic nexus thresholds.
We provide early notification that your sales are increasing depending on a state's specific economic nexus threshold requirements which may look at the total amount of sales you make in that state or the total number of sales you make to customers in the state.
When you're approaching 75% of a particular state's threshold requirements, here's an example of the email notification:
- Your business has crossed and met the economic nexus threshold for a state.
You will receive an email notification that your sales have met 100% of the economic nexus requirements.
- Your business has dropped below 75% of a threshold.
If you've received the notification that you've met 75% of a state's economic nexus requirements and our system sees that your sales amount or total falls below 75% of that threshold then you'll receive email notification of this change. *You will not receive this email if your business has met 100% of the threshold.
Economic nexus requirements vary per state and the 75% alert is dependent on that state's specific thresholds. At this time, the "75%" setting for receiving automatic notifications cannot be customized.
If you meet the economic nexus thresholds for a state, we will add the state to your Economic Nexus Insights dashboard and will not send further email notifications.
*If your business has crossed a threshold and has economic nexus in a state, to our understanding, you would have to collect for all sales after that event moving forward unless you can prove to the state that you no longer meet requirements to collect.
What do I do next if I've received a notification?
If you've received an email notification regarding approaching a threshold, this provides due notice that you might need to register soon.
- We will send another email notification when you've met economic nexus thresholds!
- As a general reminder, before collecting any sales tax, you're required to register to collect sales taxes from all customers who live in the states where you have nexus.
Therefore, when you receive the email notification that you've reached 100% of the economic nexus threshold, you are responsible for collecting sales tax made for sales after meeting the threshold. - However, if you receive the notification that your business has dropped below 75% of a threshold, we recommend waiting to register and avoid unnecessarily collecting sales tax!
- Keep in mind that this tool shows all states that are approaching the economic nexus threshold based on the lookback period for that state, regardless of whether or not you already have (or have had) nexus in these states. If you have already added this state as a nexus state, please disregard the notification and/or state within the Economic Nexus Insights tool.
Please note, these email notifications help alert you to your next action steps - you will need to take further action to review and register if required.
- If you have any questions regarding the next steps, we recommend reaching out to your sales tax or legal advisor if you have questions specific to your business operations.
- If you register and would like TaxJar to file your sales tax return for a state where you now have nexus, please be sure to enroll in AutoFile!
- We're happy to answer any questions you may have and you can reach out via the Support Contact details within your TaxJar Account.
How do I get this feature?
The Economic Nexus Insights dashboard is included for Professional accounts!
- If you are interested in upgrading and have questions, please contact us at support@taxjar.com.