Wayfair Decision
Tax & AccountingMarch 09, 2021

Sales and Use Tax Post-Wayfair Decision - Economic Nexus

Economic Nexus

This chart indicates whether a state has economic nexus provisions. In general, economic nexus means that if a remote seller passes a state’s economic threshold for total revenue or number of transactions in that state, they are legally obligated to collect and remit sales and use tax in that state. No physical presence is required.

 

Note that state nexus statutes are subject to federal constitutional restrictions. However, in South Dakota v. Wayfair, Inc. (Dkt. No. 17-494, June 21, 2018), the U.S. Supreme Court overruled Quill Corp. v. North Dakota (504 U.S. 298 (1992)) and held that physical presence is no longer required to establish sales and use tax nexus.

STATE ECONOMIC NEXUS COMMENTS CITATION
Alabama Yes

Out-of-state sellers who lack an Alabama physical presence but are making retail sales of tangible personal property into the state have a substantial economic presence in Alabama for sales and use tax purposes and are required to register for a license and to collect and remit tax, when:

  • the seller's retail sales of tangible personal property sold into the state exceed $250,000 per year based on the previous calendar year's sales; and
  • the seller conducts one or more of the activities described in Section 40-23-68, Code of Alabama.

We recommend you reference cited authority for more information.

Ala. Code §40-2-11
(7)(b)


Ala. Code §40-23-68

Ala. Code
§40-23-190

Ala. Admin. Code r.
810-6-2-.90.03

Arizona Yes Effective October 1, 2019, an economic nexus test is established for both remote sellers and marketplace facilitators.

A remote seller, not facilitated by a marketplace facilitator, will be required to pay TPT on retail sales of property if their gross proceeds or gross income with Arizona customers is more than:

  • $200,000 for 2019
  • $150,000 for 2020; and
  • $100,000 for 2021 and thereafter

A marketplace facilitator will be required to pay TPT on retail sales of property if their gross proceeds or gross income with Arizona customers is more than $100,000.

We recommend you reference cited authority for more information.

Ariz. Rev. Stat.
§42-5043
Arkansas Yes Remote sellers and marketplace facilitators are required to collect sales tax if, in the previous or current calendar year, it had aggregate sales within the state, or deliveries to locations within the state, exceeding: $100,000; or 200 transactions.

Ark. Code. Ann.
§26-52-103

Ark. Reg. GR-5

Ark. Code. Ann.
§26-53-124

California Yes

Applicable April 1, 2019, retailers located outside California (remote sellers) are required to register with
the CDTFA and collect California use tax if, in the preceding or current calendar year, the total combined sales of tangible personal property for delivery in California by the retailer and all persons related to the retailer
exceed $500,000.

We recommend you reference cited authority for more information.

Cal. Rev. & Tax.
Code §6203
Colorado Yes

Remote retailers are required to collect Colorado sales tax if they have $100,000 or more in annual sales into Colorado. Retailers must also collect state-collected local sales tax and special district tax. Retailers should contact home rule cities for guidance.

We recommend you reference cited authority for more information.

Colo. Rev. Stat.
§39-26-102
Connecticut Yes

Effective July 1, 2019, out-of-state retailers that make retail sales of tangible personal property or services from outside Connecticut to a destination within Connecticut must collect and remit sales or use tax if:

  • they made at least 200 Connecticut sales during the preceding 12-month period ending September 30; and
  • their gross receipts are $100,000 or more during that period

We recommend you reference cited authority for more information.

Conn. Gen. Stat. §1
2-407(a)(12) and (a)
(15)

Special Notice 2018(5/1)

District of Columbia Yes

Statute includes economic sales thresholds.

We recommend you reference cited authority for more information.

D.C. Code Ann.
§47-2201
D.C. Code Ann.
§47-3931
Florida No
Georgia Yes

Effective for calendar year 2019, a remote seller is a “dealer“ with nexus if they have in the previous or current calendar year from retail sales of tangible personal property for electronic or physical delivery within Georgia, or for use, consumption, distribution, or storage in Georgia:

  • more than $250,000 in gross revenue; or
  • at least 200 separate retail sales of tangible personal property

Effective January 1, 2020, the thresholds are:

  • more than $100,000 in gross revenue; or
  • at least 200 separate retail sales of tangible personal property

We recommend you reference cited authority for more information.

Ga. Code. Ann. §48-
8-30(c.1)(1)

Ga. Code. Ann. §4
8-8-2(8)(M.1)-(M.2),
(8)(P)

Hawaii Yes

Effective July 1, 2018, and applicable to taxable years beginning after 2017, a business is subject to general excise tax if, in the current or immediately preceding calendar year, it makes:

  • $100,000 or more in Hawaii sales of tangible personal property, services, or intangible property; or
  • 200 or more separate Hawaii sales of tangible personal property, services, or intangible property

We recommend you reference cited authority for more information.

Haw. Rev. Stat.
§237-2.5
Idaho Yes

Remote sellers must collect and remit state-level Idaho sales and use tax if they:

  • lack physical presence in Idaho; and
  • have over $100,000 in Idaho sales in the previous or current calendar year

We recommend you reference cited authority for more information.

Idaho Code
§63-3611

Idaho Code
§63-3620E

Illinois Yes

Remote retailers are required to collect tax use and service use tax if either threshold is met for a 12-month period:

  • their sales of property to customers in Illinois are $100,000 or more; or
  • they enter into 200 or more sales transactions in Illinois

Effective July 1, 2020, the economic nexus thresholds trigger a retailers’ occupation tax collection requirement for remote retailers in place of the use tax collection requirement.

We recommend you reference cited authority for more information.

35 ILCS 110/2
35 ILCS 120/2
35 ILCS 105/2
Indiana Yes

Sellers are liable for collecting Indiana sales tax if one of two sales thresholds are met for 12 months. Sellers meet the threshold for a given period if:

  • their gross revenue from sales into Indiana is more than $100,000; or
  • they enter into 200 or more separate transactions in Indiana

Effective July 1, 2019, marketplace facilitators are retail merchants when they engage in certain activities for sellers on their marketplace. The marketplace may be physical or on the internet. A marketplace facilitator must collect sales tax if:

  • it has economic nexus with Indiana; and
  • the retailer itself does not have nexus with Indiana

We recommend you reference cited authority for more information.

Ind. Code §6-2.5-3-1
Ind. Code §6-2.5-2-1
Iowa Yes

Effective January 1, 2019, retailers are required to collect Iowa sales tax if they have gross revenue from Iowa sales of $100,000 or more, or make 200 or more separate Iowa sales transactions, in the previous or current calendar year. Note that effective July 1, 2019, the 200 separate sale threshold for remote sellers is eliminated. Therefore, remote sellers will only be subject to the $100,000 annual taxable sales threshold.

In South Dakota v. Wayfair, Inc. (Dkt. No. 17-494, June 21, 2018), the U.S. Supreme Court overruled Quill Corp. v. North Dakota (504 U.S. 298 (1992)) and held that physical presence is no longer required to establish sales and use tax nexus.

We recommend you reference cited authority for more information.

Iowa Code
§423.14A
Kansas No Kan. Stat. Ann.
§79-3705c
Kan. Stat. Ann.
§79-3702(h)
Kentucky Yes

Effective July 1, 2018, remote sellers must collect Kentucky sales and use tax if, in the previous or current calendar year:

  • their gross receipts from Kentucky sales exceeds $100,000; or
  • they have at least 200 separate in-state sales transactions of property


Effective July 1, 2019, the economic nexus thresholds also apply to:

  • remote retailers who sell through marketplaces, and
  • marketplace providers (through their own sales or from sales made in their marketplaces)

We recommend you reference cited authority for more information.

Ky. Rev. Stat. Ann.
§139.340
Ky. Rev. Stat. Ann.
§139.450
Louisiana Yes Applies to remote dealers with sales into the state in excess of $100,000 or 200 or more separate transactions. La. Rev. Stat. Ann.
§47:301
La. Rev. Stat. Ann.
§47:304
Maine Yes Remote sellers with either 200 or more taxable transactions in Maine or sales exceeding $100,000 in the state, must collect tax. Me. Rev. Stat. Ann.
tit. 36, §1951-B
Maryland Yes

A remote seller has economic nexus if during the current or prior year:

  • gross revenue from sales of property or services into Maryland is more than $100,000; or
  • property or services are sold into Maryland 200 or more times
Reg. Sec.
03.06.01.33
Massachusetts Yes

Sellers with over $500,000 in sales and more than 100 transactions into the state in the preceding calendar year, must register, collect and remit.

Effective October 1, 2019, remote retailers must register and collect Massachusetts sales or use tax if, in the previous or current year, their annual gross sales into Massachusetts exceed $100,000.

We recommend you reference cited authority for more information.

Mass Regs. Code
tit. 830, §64H.1.7
Michigan Yes After September 30, 2018, remote sellers with over $100,000 in sales to Michigan or 200 or more transactions in the prior calendar year, have nexus.

We recommend you reference cited authority for more information.
Revenue Administrative Bulletin No.
2018-16
Minnesota Yes

Remote retailers must collect and remit tax if, over the prior 12-month period, they make either:

  • 200 or more retail sales shipped to Minnesota; or
  • $100,000 or more in retail sales shipped to Minnesota

We recommend you reference cited authority for more information.

Minn. Stat.
§297A.62(1) and
(1a)
Minn Const Art. XI,
§15
Mississippi Yes

A "person doing business in
this state," who is consequently
required to collect and remit
sales or use tax, includes any
marketplace facilitator, marketplace
seller, or remote seller with sales
that exceed $250,000 in any
consecutive 12-month period.

We recommend you reference cited
authority for more information.

Miss. Code. Ann.
§27-67-3
Miss. Code. Ann.
§27-67-4(2)
Miss. Rule
35.IV.3.09
Missouri No
Nebraska Yes Remote sellers with over $100,000 in sales or 200 or more transactions in the state annually, must collect tax.

We recommend you reference cited authority for more information.
Collection of Sales
Tax by Remote
Sellers
Nevada Yes

A remote seller has economic nexus if during the current or prior calendar year:

  • gross revenue from sales of property or services into Nevada is more than $100,000; or
  • property or services are sold into Nevada 200 or more times

We recommend you reference cited authority for more information.

Nev. Rev. Stat.
§372.105
Nev. Rev. Stat.
§374.110,Nev. Rev. Stat.
§377.040
Reg. No. R189-18
New Jersey Yes

Sales tax collection is required in New Jersey if, during the current or prior calendar year, a remote seller exceeds:

  • $100,000 in gross revenue from delivery of tangible personal property, specific digital products, or services into New Jersey; or
  • 200 or more separate transactions in New Jersey

We recommend you reference cited authority for more information.

N.J. Stat. Ann.
§54:32B-3.5
TB-83
New Jersey Division
of Taxation
New Mexico Yes N.M. Stat. Ann.
§7-9-4
New York Yes

A business that has no physical presence in New York, but meets the following requirements in the immediately preceding four sales tax quarters, is required to register and collect/remit sales tax:

  • makes more than $500,000 in sales of tangible personal property delivered in New York, and
  • makes more than 100 sales of tangible personal property delivered in New York

We recommend you reference cited authority for more information.

N.Y. Tax Law, §110
1(b)(8)(i)(E)
N.Y. Tax Law, §110
1(b)(8)(iv)
Important Notice
N-19-1
North Carolina Yes

A remote seller is required to
register, and collect and remit North
Carolina sales and use tax if, in the
previous or current calendar year,
the retailer had one or more of the following:

  • the remote seller has gross sales in excess of $100,000 sourced to North Carolina; or
  • the remote seller has 200 or more separate transactions sourced to North Carolina (“threshold”)

We recommend you reference cited authority for more information.

N.C. Gen. Stat.
§105-164.8
Directive SD-18-6
North Dakota Yes

Out-of-state sellers with no physical presence in North Dakota are subject to sales and use tax if, in the previous calendar year or the current calendar year the seller's gross sales from the sale of tangible personal property and other taxable items delivered in North Dakota exceed $100,000.

Such a seller is required to remit sales or use tax and must follow all applicable procedures and requirements as if the seller has a physical presence in North Dakota.

Remote sellers must register and begin collecting North Dakota sales and use tax on the earlier of:

  • 60 days after meeting the threshold, or
  • the following calendar year


NOTE: Previously, North Dakota had a 200 or more separate transactions threshold, too. It was eliminated retroactively to tax years beginning on or after January 1, 2019.

Effective October 1, 2019, a marketplace facilitator meeting the $100,000 in sales threshold is required to collect tax on sales of property and services delivered into North Dakota, which are made by a marketplace seller through the marketplace facilitator.

We recommend you reference cited authority for more information.

N.D. Cent. Code §5
7-39.2-02.2
N.D. Cent. Code §5
7-40.2-02.3
N.D. Cent. Code §5
7-39.2-02.3
N.D. Cent. Code §5
7-40.2-02.4
Remote Seller Sales
Tax, North Dakota
Office of State Tax
Commissioner
Ohio Yes A seller or marketplace facilitator has substantial nexus if, in the current or preceding calendar year, it (1) has gross receipts exceeding $100,000 from sales into Ohio, or (2) engages in 200 or more separate sales transactions in Ohio.

We recommend you reference cited authority for more information.
Ohio Rev. Code
Ann. §5741.01
Oklahoma Yes

Remote sellers:
By July 1, 2018, and by June 1 of each calendar year starting in 2019, a “remote seller” who had at least $10,000 ($100,000 effective November 1, 2019) in aggregate Oklahoma sales in the preceding 12-calendar-month period must file an election with the Oklahoma Tax Commission to:

  • collect and remit sales and use tax due on tangible personal property and obtain a sales tax permit, or
  • through October 31, 2019, comply with notice and reporting requirements. The notice and reporting option is no longer available to remote sellers effective November 1, 2019


Marketplace facilitators and referrers:
By July 1, 2018, and by June 1 of each calendar year starting in 2019, a “remote seller,” “marketplace facilitator,” or “referrer” who had at least $10,000 in aggregate Oklahoma sales in the preceding 12-calendar-month period must file an election with the Oklahoma Tax Commission to:

  • collect and remit sales and use tax due on tangible personal property and obtain a sales tax permit, or
  • comply with notice and reporting requirements
Okla. Stat. tit. 68,
§1392
Pennsylvania Yes

Beginning July 1, 2019, persons making more than $100,000 in Pennsylvania sales in the previous 12 months must:

  • register for a license; and
  • collect, report, and remit sales tax

Effective through June 30, 2019: By March 1, 2018, and by June 1 of each subsequent calendar year, remote sellers, marketplace facilitators, and referrers with aggregate sales of tangible personal property subject to Pennsylvania sales and use tax of $10,000 or more in the previous 12-calendar-month period must file an election with the Department of Revenue to either:

  • collect and remit the sales tax, or
  • comply with certain notice and reporting requirements

We recommend you reference cited authority for more information.

72 P.S. §7213.1(a),72 P.S. §7201(b)(3.
5)
Sales and Use Tax
Bulletin 2019-01
Uncodified Sec. 33,
Act 13 (H.B. 262),
Laws 2019
Rhode Island Yes Applies to remote dealers with sales into the state in excess of $100,000 or 200 or more separate transactions. R.I. Gen. Laws
§44-18.2-1 et seq.
South Carolina Yes Economic nexus occurs when gross sales into South Carolina are more than $100,000 in this or the last calendar year. Revenue Ruling
18-14
South Dakota Yes Effective November 1, 2018, remote retailers are required to collect South Dakota sales tax if they have $100,000 or more in annual sales into South Dakota, or make 200 or more separate annual sales transactions into South Dakota.

We recommend you reference cited authority for more information.
S.D. Codified Laws
§10-45-2
Tennessee Yes

A dealer with no physical presence
in Tennessee must register with the
Tennessee Department of Revenue
and collect and remit sales or use
tax if the dealer:

  • engages in the regular or systematic solicitation of consumers in Tennessee through any means; and
  • made sales that exceeded $100,000 (prior to October 1, 2020, $500,000) to consumers in Tennessee during the previous 12-month period

We recommend you reference cited
authority for more information.

Tenn. Code. Ann.
§67-6-501, Tenn. Comp. R. & Regs. 1320-5-1-.129(2), Important Notice No. 19-04, Important Notice No.19-05

Texas Yes

Sales tax collection will be required in Texas if, during the preceding 12 calendar months, a remote seller exceeds $500,000 in total Texas revenue.

The initial 12 calendar months for calculating a remote seller's Texas revenues is July 1, 2018, through June 30, 2019.

We recommend you reference cited authority for more information.

34 Tex. Admin.
Code §3.286
Utah Yes

A sales tax collection obligation is imposed on remote sellers that:

  • have more than $100,000 in gross revenue in the state or
  • make at least 200 separate transactions in the state

We recommend you reference cited authority for more information.

Utah Code Ann.
§59-12-107
Utah Code Ann.
§59-12-102
Utah Code Ann.
§59-12-107.6
Publication 37
Vermont Yes

A "vendor" having nexus with Vermont includes a person making sales of tangible personal property from outside Vermont to a destination within Vermont and not maintaining a place of business or other physical presence in Vermont who:

  • engages in regular, systematic, or seasonal solicitation of sales of tangible personal property in Vermont; and
  • has made sales from outside Vermont to destinations within Vermont of at least $100,000 or totaling at least 200 individual sales transactions during any 12-month period preceding the monthly period at issue

Effective June 1, 2019, the definition of "vendor" is expanded to include certain marketplace facilitators and marketplace sellers.

We recommend you reference cited authority for more information.

Vt. Stat. Ann. tit. 32,
§9701(9)(F) and
(14)
Vt. Stat. Ann. tit. 32,
§9713
Virginia Yes

Remote sellers are required to register, collect and remit retail sales and use if they have:

  • more than $100,000 in annual gross revenue from sales in Virginia; or
  • at least 200 sales transactions in Virginia


We recommend you reference cited authority for more information.

Va. Code Ann.
§58.1-612
Washington Yes Remote sellers with more than $100,000 in gross retail sales in Washington in the current or prior calendar year, must register and collect sales tax.

We recommend you reference cited authority for more information.
Wash. Rev. Code
§82.08.053
MarketPlace
Fairness Notice
Wash. Rev. Code
§82.08.052
West Virginia Yes

Effective January 1, 2019, any out-of-state vendor who, as of July 1, 2018, is not required to collect and remit state and municipal sales and use taxes, either because they do not have in-state physical presence or they have not voluntarily agreed to collect and remit the tax, who delivers more than $100,000 of goods or services into West Virginia, or engages in 200 or more separate transactions for the delivery of goods and services into West Virginia, during calendar year 2018, will be required to collect and remit taxes on all sales made on and after January 1, 2019 that are delivered into West Virginia.

This collection requirement applies to out-of-state vendors that currently do not collect state and municipal sales and use taxes but meet either the $100,000 threshold, or the 200 transactions threshold, during calendar year 2018. Vendor responsibility for collection and remittance of these taxes will be determined annually each year thereafter.

In addition, collection requirements apply to sales by marketplace facilitators or referrers made on and after July 1, 2019.

We recommend you reference cited authority for more information.

W. Va. Code
§11-15A-1
W. Va. Code
§11-15-3(b)
W. Va. Code
§11-15A-6b
W. Va. Code R.
§110-15-2
Administrative
Notice 2018-18
Wisconsin Yes

Beginning October 1, 2018, remote retailers must register and collect Wisconsin sales or use tax if, in the previous or current year, their:

  • annual gross sales into Wisconsin exceed $100,000; or
  • annual number of separate sales transactions into Wisconsin is 200 or more

We recommend you reference cited authority for more information.

Wis. Stat.
§77.51(13gm)
Wyoming Yes Remote sellers with over $100,000 in sales to Wyoming or 200 or more transactions in the current or prior calendar year, have nexus.

We recommend you reference cited authority for more information.
Wyo. Stat. Ann.
§39-15-501
Source: Wolters Kluwer CCH® AnswerConnect, 2021
Permission for use granted.
Carol Kokins-Graves
Senior Content Management Analyst

Carol Kokinis-Graves, an attorney, is a senior content management analyst in the Indirect Tax Group at Wolters Kluwer Tax & Accounting. She has spent more than 23 years analyzing and reporting state and local sales and use tax legislation, court cases, department of revenue rulings, and regulations. Carol is a speaker on state and local tax issues and has been quoted in top media publications, including Forbes, NBC News, The Los Angeles Times, and USA Today.