What changed in 2018
Before South Dakota v. Wayfair, a state could only require you to collect its sales tax if you had a physical presence there — an office, staff, or inventory. The Supreme Court removed that requirement in June 2018, and states moved quickly to enact economic nexus rules based on sales volume alone.
The practical consequence: a business in Bogotá or Madrid shipping to customers in twenty US states can have collection obligations in several of them without ever having been to the country.
Thresholds, and why you cannot learn just one
A common pattern is $100,000 in sales or 200 separate transactions into the state in the current or prior calendar year. Treat that as a starting point, not a rule — the detail varies in ways that change the answer:
- Some states use a higher dollar threshold, and several have dropped the transaction count entirely after it caught small sellers with many low-value orders
- Some measure gross sales, others only taxable or retail sales
- The measurement period differs — calendar year, trailing twelve months, or the state's fiscal year
- The date collection must begin after you cross varies too
If you should have collected and did not, the tax is generally still owed — and you can no longer go back and charge past customers. It comes out of your margin, with penalties and interest. This is why a nexus review is worth doing before you are certain you have a problem.
Marketplace facilitator rules
If you sell through Amazon, Etsy, eBay or a similar platform, the marketplace is generally required to collect and remit sales tax on those transactions itself. That is genuinely helpful and it does not end your obligations:
- Direct sales through your own site are still yours to handle
- Some states still count marketplace sales toward your nexus threshold
- Some states still expect a return from you reporting marketplace sales, even at zero tax due
- Inventory held in a marketplace warehouse can create physical presence independently
What registration actually commits you to
Registering is not a one-off. It starts a recurring obligation:
- Filing on a schedule — monthly, quarterly or annually, set by the state and revised as your volume changes
- Zero returns. Most states want a return even in a period with no sales. Silence is a delinquency, not an absence of activity
- Correct rates, often at county and city level, sourced by destination in most states
- Exemption certificates collected and retained for resale or exempt customers
Registering everywhere “to be safe” is a real mistake: each registration is an ongoing filing burden and a standing invitation to a notice. Register where you have nexus, and not elsewhere.
What we need from you
- Sales by state for the last two years — revenue and transaction count
- Which channels you sell through, and which are marketplaces
- Where inventory is held, including third-party warehouses
- What you sell — taxability differs sharply by product category, and services differ again
- Any states where you are already registered, and the login details
- Any notices received from a state department of revenue
If you suspect you are already past a threshold somewhere, most states run voluntary disclosure programmes that limit the look-back period and commonly waive penalties. That door closes once the state contacts you first.
Key facts at a glance
Frequently asked questions
I am not a US company. Does US sales tax apply to me?
It can. Economic nexus is based on sales into a state, not on where the seller is incorporated. A foreign company shipping to US consumers can have the same obligations as a domestic one.
Amazon collects tax for me. Am I finished?
Not necessarily. Marketplace collection covers those transactions, but direct sales are still yours, some states count marketplace sales toward your threshold, and some still want a return from you.
Should I just register in every state?
No. Each registration creates a permanent filing obligation, including zero returns for quiet periods. Register where you have nexus and nowhere else.
What if I should have been collecting and was not?
The tax is generally still owed and it comes out of your margin, since you cannot bill past customers. Most states offer voluntary disclosure with a limited look-back and penalty waiver, but only if you approach them before they contact you.
Does having sales tax nexus mean I owe state income tax too?
Not automatically. They are separate tests with separate thresholds, and crossing one does not decide the other. For foreign-owned entities, treaty protection may apply to income tax while sales tax still applies.
Not sure where you have crossed a threshold?
Send us sales by state for the last two years. We will tell you where you have nexus, where you do not, and whether voluntary disclosure is worth using anywhere.
We reply within one business day. Getting in touch is not a client engagement until we confirm it in writing.