State Sales Tax Thresholds Explained for Remote Sellers
Selling products online across state lines? You may be required to collect sales tax—even if your business has no physical location in the customer’s state.
Every state with a sales tax has its own economic nexus threshold, which determines when a remote seller must register, collect, and remit sales tax.
What Is an Economic Nexus Threshold?
An economic nexus threshold is the level of business activity that creates a sales tax obligation in a state.
States typically measure this using:
- Total sales revenue into the state
- Number of transactions (in some states)
- A specific measurement period, such as the current or previous calendar year
Most Common 2026 Thresholds
Most sales-tax states follow one of these models:
- $100,000 in annual sales (most common)
- $100,000 or 200 transactions (still used by several states)
- $250,000 (Alabama and Mississippi)
- $500,000 (California and Texas)
- New York: More than $500,000 in sales and more than 100 transactions
Not Every State Counts Sales the Same Way
Meeting the threshold isn’t always straightforward because states calculate it differently.
Some states count:
- Gross sales
- Retail sales
- Taxable sales only
Exempt sales, wholesale transactions, and digital products may be treated differently depending on state law.
Measurement Periods Vary
States also use different testing periods to determine whether you’ve crossed the threshold.
Examples include:
- Current calendar year
- Previous calendar year
- Rolling 12-month period
- Quarterly reviews
Because of these differences, businesses should monitor sales regularly instead of waiting until year-end.
States Without Statewide Sales Tax
These states do not impose a general statewide sales tax:
- Delaware
- Montana
- New Hampshire
- Oregon
As a result, they do not have general economic nexus thresholds for state sales tax collection.
Don’t Confuse Nexus with Filing Frequency
Some states have separate rules for how often businesses must file sales tax returns.
For example, Kansas uses filing frequency thresholds based on the amount of tax collected, but those rules are different from the economic nexus threshold that determines whether you must collect tax in the first place.
Key Takeaways
- ✔ Most states require remote sellers to collect sales tax after exceeding an economic nexus threshold.
- ✔ The most common threshold is $100,000 in annual sales.
- ✔ Some states still include a transaction-count requirement.
- ✔ States differ on which sales count toward the threshold and how they measure it.
- ✔ Regularly monitoring state-by-state sales can help prevent unexpected compliance issues.
Need Help Managing Multi-State Sales Tax?
If your business sells across multiple states, tracking economic nexus can quickly become complicated. Our CPA team can help determine where you have filing obligations, register your business, and keep you compliant with changing state sales tax laws.
Contact us today for expert guidance on your multi-state sales tax responsibilities.
