E-commerce · Sales tax
Most states require collection after $100,000 in sales. A few set higher bars, and many have dropped the 200-order test. General information, as of 2026.
$100,000 is the common threshold
CA, TX and NY use $500,000
Track sales by state monthly
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Economic nexus means a state can require you to collect its sales tax once your sales into that state pass a threshold, even if you have no office, staff or inventory there. As of 2026, most states set the threshold at $100,000 in sales over the current or previous year. California, Texas and New York use $500,000, Alabama and Mississippi use $250,000, and a shrinking group still also counts 200 transactions.
This is general information as of 2026, not tax or legal advice. Thresholds, measurement periods and what counts toward them change, so confirm with each state’s revenue department or a sales tax professional before you register or stop collecting.
Before 2018, states could generally only require sellers with a physical presence to collect sales tax. On June 21, 2018, the US Supreme Court decided South Dakota v. Wayfair, ruling that the physical presence rule was “unsound and incorrect” and overruling the earlier Quill decision. South Dakota’s law applied to sellers that delivered more than $100,000 of goods or services into the state, or made 200 or more separate sales, in a year.
Every state with a statewide sales tax has since adopted an economic nexus rule, and most copied South Dakota’s numbers. Over time, many have dropped the 200-transaction test, because it caught small sellers with many low-value orders.
The groups below follow the Sales Tax Institute’s state chart as of August 1, 2026, and we checked a dozen of them (Alabama, California, Connecticut, Florida, Georgia, Illinois, Kentucky, New York, Ohio, Texas, Utah and Washington) against each state’s revenue department in October 2026. Thresholds and measurement periods change, sometimes mid-year, so treat this as a starting point and confirm the current rule on each state’s revenue department website before you register or stop collecting.
$100,000 in sales, no transaction count: Arizona, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Missouri, New Mexico, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Wisconsin and Wyoming. Pennsylvania and Washington also use $100,000. Pennsylvania has separate notice-and-reporting rules for some smaller remote sellers; Washington ended its notice-and-reporting option in 2019.
$100,000 or 200 transactions: Arkansas, District of Columbia, Georgia, Hawaii, Maryland, Michigan, Minnesota (200 retail sales), Nebraska, Nevada, New Jersey, Ohio, Rhode Island, Vermont, Virginia and West Virginia, plus Puerto Rico.
$100,000 and 200 transactions: Connecticut requires both, measured over the 12 months ending September 30.
Higher thresholds: Alabama $250,000 plus specified activities; Mississippi more than $250,000; California $500,000; Texas $500,000; New York $500,000 in sales of tangible goods and more than 100 sales.
No statewide sales tax: Delaware, Montana, New Hampshire and Oregon. Alaska has no state sales tax, but many local jurisdictions that adopted the Alaska Remote Seller Sales Tax Code apply a $100,000 threshold.
The trend is toward a single dollar test. According to the Sales Tax Institute’s chart, these states removed their 200-transaction thresholds:
If you registered somewhere only because of a transaction count, check whether you still meet the dollar threshold. Stopping collection has its own rules, so ask the state or your advisor before you deregister.
An illustrative example, with made-up figures: take a Florida-based online store with these sales last calendar year, all through its own website:
The same store could owe tax in two states it has never visited and none in its largest out-of-state market. That is why a per-state report beats a gut feeling.
Book a free 30-minute call. We look at your store setup with you and tell you how we would automate tax calculation and reporting. No obligation. Pick a time.
If you sell mainly from one state, start by confirming your home state setup. Our guide to Shopify vs WooCommerce compares how each platform handles tax and integrations. Then pull last year’s sales by state, mark any state above $100,000 or 200 orders, and talk to a CPA about registration. Keep the report, the date you crossed each threshold and the date you registered in one place, because those are the first things a state asks for if it reviews your filings. Our web design team configures tax settings on Shopify, BigCommerce and WooCommerce stores, and our systems integration team connects stores to accounting so tax reports and books agree.
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Economic nexus is a rule that requires an out-of-state seller to collect a state’s sales tax once its sales into that state pass a set threshold, even without a physical presence. It followed the 2018 Supreme Court decision in South Dakota v. Wayfair.
As of 2026, $100,000 in sales over the current or previous year. Some states also count 200 transactions, while California, Texas and New York use $500,000 and Alabama and Mississippi use $250,000.
Recent removals include Indiana and North Carolina and Wyoming in 2024, Alaska’s remote seller code and Utah in 2025, and Illinois and Kentucky in 2026, according to the Sales Tax Institute.
It depends on the state. Marketplaces collect tax on their own orders, but some states still count those sales toward your threshold and others exclude them. Check each state’s rules.
You generally need to register with that state, start collecting tax on taxable sales delivered there and file returns on the schedule the state assigns. Start dates vary, so confirm with the state or a tax professional.
