Economic Nexus Thresholds by State: 2026 Complete Guide

No — you only have to register in states where you have economic nexus or physical nexus. Economic nexus requires that you exceed a state's revenue or transaction threshold (most commonly $100,000 in gross revenue OR 200 transactions per year). Physical nexus is triggered by any physical presence in a state — including FBA inventory stored in an Amazon warehouse. If you sell into all 50 states but your revenue in most states is below the threshold, you only register in the states where you have actually crossed the line. The practical challenge is knowing which states you have crossed in — which requires aggregating revenue from all sales channels, not just your primary storefront.

Most states measure gross receipts or gross revenue — meaning the total sale price before deductions for refunds, returns, or shipping. Several states — including California (Cal. Rev. & Tax. Code §6203), Texas (Tex. Tax Code §151.107), and New York (N.Y. Tax Law §1101(b)(8)(iv)) — explicitly use 'gross receipts' as their measurement base. This means a $100 sale where you net $70 after cost of goods still counts as $100 toward the threshold. Some states exclude certain categories: California excludes sales for resale, for example. When in doubt, use gross revenue as your measurement base — it is the conservative, defensible position. Nontaxable sales (digital goods that are exempt in some states) often still count toward the gross-receipts threshold even though no tax is due on the sale itself.

Yes. Physical nexus has no minimum threshold. If Amazon stores your inventory in a fulfillment center in any state, you have physical nexus in that state — regardless of your revenue or transaction count there. Amazon can and does move inventory between fulfillment centers without seller approval. FBA sellers commonly discover they have inventory (and physical nexus) in 20 or more states. This is separate from economic nexus: you can have physical nexus in a state with zero economic nexus threshold concerns because your revenue there is $200, and you still must register. Amazon collecting tax on marketplace sales under marketplace facilitator laws does not eliminate your physical nexus registration obligation.

You accumulate unregistered nexus liability. The state does not know you exist yet, but the obligation is running. When the state eventually discovers you — typically through audit, information-reporting matches (1099-K data, marketplace reports), or a voluntary disclosure — the look-back period for unpaid tax is typically two to four years, depending on the state. You will owe the uncollected tax, plus interest (commonly 5–12% annually depending on the state), plus failure-to-file penalties (commonly 5–25% of tax due per missed return). Operating without a sales tax permit is also a separate violation in many states. Some states offer voluntary disclosure agreements (VDAs) that cap the look-back period and waive penalties for sellers who come forward before being contacted — but once the state contacts you, the VDA window closes.

In all 45 states with sales taxes, marketplace-facilitated sales count toward your economic nexus threshold as of May 2026 — even though the marketplace, not you, collected and remitted the tax. This means: if you sell $70,000 through your Shopify store and $35,000 through Amazon in a given state, you have $105,000 in revenue toward that state's $100,000 threshold. You have nexus. Amazon handled the tax on the Amazon sales, but you must now register and collect tax on your Shopify sales into that state. The marketplace collection does not substitute for your own registration — it only covers the sales that flow through the marketplace itself.

SaaS taxability varies significantly by state, but taxability and nexus are separate questions. Even if your SaaS product is not taxable in a state, those subscription revenues may still count toward your economic nexus threshold in states that measure gross receipts rather than taxable sales. Once you have nexus, you must register and file returns — even if every return shows $0 tax due because your product is nontaxable in that state. States where SaaS is explicitly taxable include New York, Pennsylvania, and Texas. States where SaaS taxability is unclear or subject to product-by-product analysis include California, Illinois, and Florida. Consult a CPA familiar with digital goods taxation for your specific product.

As soon as you complete your registration. The typical sequence: cross threshold, register within 30–60 days (the registration window varies by state — Texas requires registration before making any taxable sales; Louisiana and most other states allow 30 days after establishing nexus), then begin collecting on the first taxable sale after your registration is effective. You cannot retroactively collect from customers on sales made before your registration date. There is a gap: you had nexus obligation but no permit. Some states hold sellers harmless for uncollected tax during the brief registration window; others do not. The practical advice is to register as quickly as possible after crossing — not to wait for the next quarter or the next tax season.

Trial subscriptions where no money changes hands generally do not count — economic nexus thresholds are based on gross receipts, and a free trial generates no receipts. Refunded transactions are more complicated. Most states do not have clear statutory guidance on whether refunded sales count toward the threshold. The conservative position: count the sale when it occurs, deduct the refund when it processes, and net them for threshold purposes on a monthly basis. In practice, if your refund rate is low (under 5%), the difference is unlikely to matter. If you operate a high-refund business (software trials, subscription boxes), track net revenue per state for threshold purposes and document your methodology in case of audit.

Most states have a three-year statute of limitations on sales tax assessments from the date the return was due. If you never registered and never filed, most states treat the statute as open — meaning there is no limitation, and the state can go back as far as the Wayfair decision date (June 2018) or the state's own economic nexus effective date, whichever is later. Some states cap the look-back at three or four years even for non-filers; others — including California — can go back further under fraud or willful evasion theories. Industry summaries note that 'any state can come after you for back-owed tax liability as far as eight years' in the worst cases. Voluntary disclosure agreements typically cap the look-back period at two to three years and waive penalties, making them valuable for sellers with significant historical exposure.

Give your accountant a complete picture of every sales channel: total gross revenue per state per year, broken down by channel (Shopify, Amazon, eBay, Etsy, wholesale, your own website). Do not assume they have visibility into channels you have not specifically provided. AICPA-cited research found that accountants managing multi-state clients with manual methods tracked '46 distinct state nexus rules per client' — the complexity is real, and gaps in data flow from client to accountant are the most common cause of missed nexus obligations. Ask your accountant explicitly: are you tracking my Amazon and Etsy sales for nexus purposes, or only my Shopify/direct sales? If the answer is 'only direct,' your nexus picture is incomplete.