Economic Nexus for E-Commerce: State-by-State Sales Tax Thresholds

South Dakota v. Wayfair (2018) established that a state can require an out-of-state seller to register and collect sales tax once it crosses that state's economic nexus threshold — a dollar amount of sales, a transaction count, or both — with no physical presence required. Every state with a sales tax now has its own version of this rule.

For e-commerce merchants specifically, two other things layer on top of the basic threshold test and change what you actually need to do about it: marketplace facilitator laws and inventory-based physical nexus. Both matter more for goods sellers than for most other business models.

Marketplace facilitator laws: you may already be covered

Nearly every US state with a sales tax now has a marketplace facilitator law — these require platforms like Amazon, Etsy, and Walmart Marketplace to collect and remit sales tax on behalf of their third-party sellers, on sales made through that platform. If you sell exclusively through a marketplace that already collects tax on your behalf, you may not need to separately register and collect in states where your only sales are through that marketplace — even if your combined sales would otherwise cross the state's nexus threshold.

This gets more complicated fast for merchants selling through multiple channels — a marketplace plus a direct Shopify/WooCommerce store, for example. Marketplace sales and direct sales often need to be tracked separately against the same state threshold, since the marketplace's collection obligation doesn't automatically extend to your direct-channel sales in that state. A merchant can end up needing to register directly in a state specifically because of their direct sales volume, even though their marketplace sales in that same state are already being handled by the platform.

Inventory-based nexus: a separate trigger, no revenue threshold required

Economic nexus (the Wayfair threshold) isn't the only way to trigger a registration obligation. Physical presence still creates nexus on its own, independent of any sales threshold — and for e-commerce merchants, the most common form of this is storing inventory in a state, most often through a fulfillment network like Amazon FBA. If your inventory sits in a warehouse in a given state, that state can generally require you to register and collect there regardless of how much you've actually sold to customers in that state. This is a real, commonly-missed trigger for FBA sellers specifically — the revenue-threshold table below doesn't apply to this kind of nexus at all, because there's no revenue threshold to cross in the first place.

State-by-state nexus threshold table

The table below covers the sales-threshold (economic nexus) question — it doesn't cover marketplace-facilitator coverage or inventory-based nexus, both of which can trigger a registration obligation independent of these thresholds, as covered above.

There are 45 separate jurisdictions with an economic nexus rule, each with its own threshold, its own definition of what counts as a taxable sale, and its own habit of changing the rules without much notice.

• Most states: $100,000 in annual sales is the trigger.
• Higher-threshold states: California, Texas, and New York sit at $500,000. Alabama and Mississippi sit at $250,000.
• Transaction-count thresholds are being phased out. Illinois dropped its 200-transaction test effective January 1, 2026; Kentucky follows August 1, 2026.
• New York and Connecticut require both the dollar threshold and the transaction threshold to be crossed (an "AND" test) — meaningfully harder to trigger than a typical OR state.

As of May 4, 2026 — sourced from a single secondary aggregator, not independently verified per-state. Thresholds change; confirm the current figure for any state before relying on it for a real registration decision.

Why this is hard to track by hand

Beyond the initial lookup, the real difficulty is that none of this is static — states remove transaction thresholds, adjust dollar figures, and change what counts as an "includable sale," and marketplace-facilitator rules and inventory footprints shift independently of all of that. A merchant selling across multiple channels and states needs to re-check exposure continuously, not just once at initial setup — a missed threshold crossing (or a missed direct-sales obligation alongside marketplace coverage) means back taxes, penalties, and interest accruing quietly until an audit surfaces it.

Related Reading

• Is SaaS Taxable? — the nexus rules are the same, but taxability works very differently for software
• US tax coverage — Clearvo's full US sales tax implementation details