- Sales tax nexus is a business’s connection to a state that requires collecting and remitting sales tax there.
- Nexus can be triggered by physical presence (like offices, warehouses, or employees) or by economic activity (exceeding sales or transaction thresholds).
- The 2018 Supreme Court case South Dakota vs. Wayfair established that even without physical presence, businesses must collect sales tax if they meet certain sales or transaction thresholds in a state.
- Each state sets its own thresholds for economic nexus, often $100,000 in sales or 200 transactions per year.
- E-commerce and expanding into new states can create new sales tax obligations, so businesses must evaluate their nexus status in every state where they operate or sell.
Source: uschamber.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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