Nexus refers to the connection or presence that a business has in a particular state that gives that state the authority to require the business to collect and remit sales tax on its taxable sales in that state. In the context of U.S. sales tax, nexus is established when a business has a physical presence in a state (physical nexus), such as a store, warehouse, or employees, or when it engages in certain types of economic activity in that state (economic nexus).
- If a business has no nexus in a particular state, then that state cannot require the business to charge sales tax.
- Sales threshold
- Reference period
- Transactions made through a registered marketplace facilitator excluded
- Transactions made to a reseller excluded
- Limited to certain transaction type
Source: Fonoa
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