- Nexus studiesWhere your sales, inventory, employees or activities create an obligation.Learn more about Nexus studies →
- RegistrationOut-of-state sales tax registrations and filing calendars.Learn more about Registration →
- Voluntary disclosureComing forward for past exposure, usually with penalties waived and a limited lookback.Learn more about Voluntary disclosure →
- Audit helpRepresentation and documentation in state sales tax audits.Learn more about Audit help →
What creates nexus
- Physical presence: an office, employees, property or inventory in a state, including inventory stored in a fulfillment center.
- Economic nexus: after the Supreme Court's 2018 Wayfair decision, states can require collection once your sales into the state pass a threshold. Many use $100,000 of sales, sometimes alongside a transaction count.
Close to home: New Jersey uses $100,000 of sales or 200 separate transactions in the current or prior year. New York uses more than $500,000 of sales of tangible property and more than 100 sales, measured over the prior four sales tax quarters.
Marketplaces don't solve everything
Marketplace facilitators like Amazon and Etsy generally collect and remit sales tax on sales made through their platforms. But sales through your own website, wholesale sales and services are still your responsibility, and inventory a marketplace stores for you can still create nexus.
Behind? Voluntary disclosure
If you've had nexus for a while without collecting, most states offer voluntary disclosure agreements that typically limit how many years back you owe and waive penalties, as long as you come forward before the state contacts you. Once a state reaches out first, those benefits are usually gone.
Sales tax is not the only state tax
Selling into a state can also create income or franchise tax filing obligations. Federal law (P.L. 86-272) protects some sellers of tangible goods whose only activity is soliciting orders, but it doesn't cover services or sales tax.
Frequently asked questions
Do I have to collect sales tax in states where I don't have an office?
Possibly. Under economic nexus rules, selling more than a state's threshold into it can require you to register and collect, even without a physical presence.
What are the New Jersey and New York thresholds?
New Jersey: more than $100,000 of sales or 200 or more transactions. New York: more than $500,000 of sales of tangible personal property and more than 100 sales over the prior four sales tax quarters.
I've been selling into a state without collecting. What should I do?
Have your exposure reviewed, and consider a voluntary disclosure agreement before the state contacts you. It usually limits the lookback period and waives penalties.
Does Amazon handle my sales tax?
For sales through Amazon's marketplace, Amazon generally collects and remits. Your own website sales and other channels are still your responsibility.