Do I Need to Collect Sales Tax?
Answer 6 questions. Get a clear answer in 60 seconds.
What do you sell?
This helps determine how taxability rules apply to your business.
How Sales Tax Nexus Works
Any business selling products or services to customers in a US state may be required to collect sales tax if it exceeds that state's economic or physical nexus thresholds.
Economic Nexus
Triggered by sales volume alone. After the 2018 South Dakota v. Wayfair ruling, all 45 states with a sales tax enacted economic nexus laws. The most common threshold is $100,000 in annual sales or 200 transactions in a state.
Physical Nexus
Triggered by physical presence — employees, offices, warehouses, or inventory storage. Physical nexus requires registration regardless of revenue. FBA sellers often have physical nexus in multiple states through Amazon's fulfillment centers.
Key Thresholds by State
- California requires sales tax registration after $500,000 in annual California sales (the highest threshold in the country).
- New York requires registration after $500,000 in sales AND 100 transactions — both conditions must be met.
- Most states (including Texas, Florida, Illinois, and 35+ others) require registration after $100,000 in sales or 200 transactions, whichever comes first.
- Alabama and Mississippi use a higher $250,000 revenue-only threshold.
- Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.
Registration deadlines vary. Most states give you 30–60 days after crossing a nexus threshold before penalties apply. California requires registration within 30 days. Waiting too long can result in back taxes, interest, and penalties.
Common Questions About Sales Tax Nexus
Do I need a sales tax permit if I only sell online?
Yes. Selling online does not exempt you from sales tax collection. Since the 2018 Supreme Court ruling in South Dakota v. Wayfair, states can require remote sellers to collect tax once they exceed an economic nexus threshold — typically $100,000 in sales or 200 transactions in that state per year.
What is economic nexus and how does it affect me?
Economic nexus means a state can require you to collect sales tax based solely on your sales volume in that state — no physical presence required. Most states set the bar at $100,000 in annual sales or 200 transactions. Once you cross the threshold, you generally have 30–60 days to register for a sales tax permit.
Does selling on Amazon or Etsy mean I do not need to collect sales tax?
Partially. Amazon, Etsy, and eBay are marketplace facilitators — they collect and remit sales tax on your behalf in most states for sales made through their platforms. However, sales through your own website or Shopify store remain your responsibility. If you have nexus in a state, you must collect and remit tax on those direct sales.
What states have no sales tax?
Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. If your business is located in one of these states, you still need to monitor economic nexus in the other 45 states (plus Washington DC) if you sell to customers there.
See exactly where you have nexus
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This tool is for informational purposes only and does not constitute tax or legal advice. NexusFlag Research Team · Last updated: April 2026