Key takeaways
- Sales types vary by state: Many states include all gross sales, taxable and exempt, toward economic nexus thresholds, but some only count taxable sales (e.g., Florida, Connecticut).
- Marketplace sales treatment varies: Some states (e.g., Maryland, New Jersey) count marketplace sales toward your threshold, while others (e.g., Indiana, Virginia) count only your direct sales.
- SaaS sellers must be cautious: Even in states where SaaS isn’t taxed, those sales may still count toward nexus thresholds and trigger registration or reporting obligations.
In short: Economic nexus means a remote seller must collect and remit US sales tax in a state once its sales there pass a set threshold. Most states use $100,000 in sales, some add a 200-transaction test, and states differ on which sales count, such as exempt, marketplace and service sales.
Update (October 2026): The state list is current as of 8 October 2026. Illinois dropped its 200-transaction test on 1 January 2026 and Kentucky on 1 August 2026, after Utah (1 July 2025) and Alaska (1 January 2025). From 2 July 2026, North Carolina sellers start collecting on the first day of the first month at least 60 days after passing $100,000. Marketplace rules for Indiana, Louisiana, Pennsylvania and Virginia are corrected below.
If your business makes remote sales across state lines in the U.S., you need to understand economic nexus. Since the South Dakota v. Wayfair, Inc. decision, states require out-of-state sellers to collect and remit sales tax once they pass certain economic thresholds. But it’s not just about crossing a sales or transaction limit. The types of sales included in those thresholds vary widely by state.
Some states count all gross sales, while others include only taxable retail transactions. Some specifically exclude exempt or resale sales. Whether you sell physical products, digital goods or services, knowing what counts is key to staying compliant.
Below is a state-by-state sales tax guide. It shows each state’s economic nexus threshold and which types of sales count toward it, including rules for marketplace sales and services. Read more in our guide: New Tax Laws Passed in California, North Carolina, and Vermont.
Which states still have a 200-transaction threshold?
As of October 2026, 15 jurisdictions still use a 200-transaction test alongside $100,000 in sales. Meeting either one creates nexus.
- Either test (sales or 200 transactions): Arkansas, District of Columbia, Georgia, Hawaii, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey, Ohio, Rhode Island, Vermont, Virginia and West Virginia.
- Both tests required: Connecticut ($100,000 and 200 transactions) and New York ($500,000 and more than 100 sales).
Which states have removed the transaction threshold?
Most states that had a 200-transaction test have dropped it. Recent removals:
- Kentucky: removed from 1 August 2026.
- Illinois: removed from 1 January 2026.
- Utah: removed from 1 July 2025.
- Alaska (local tax): removed from 1 January 2025.
- Wyoming: removed from 1 July 2024.
- North Carolina: removed from 1 July 2024.
- Indiana: removed from 1 January 2024.
- Louisiana: removed from 1 August 2023.
- South Dakota: removed from 1 July 2023.
- Earlier: Maine (2022), Wisconsin (2021) and Washington (2019).
Do marketplace sales count toward the threshold?
It depends on the state. Examples confirmed on state revenue pages:
- Counted: Maryland, New Jersey, North Carolina and Alaska's local remote seller tax.
- Direct sales only: Indiana (generally), Louisiana, Pennsylvania (where the marketplace collects) and Virginia.
What are the economic nexus thresholds in each state?
The economic nexus threshold in most states is $100,000 in sales, and some states also use a 200-transaction test. Alabama and Mississippi use $250,000, while California, New York and Texas use $500,000. Each state below also shows which sales count toward its threshold. You can also read Alaska Removes Sales Tax Transaction Threshold.
Alabama
- Threshold: $250,000 in retail sales in the previous calendar year. No transaction test.
- Included sales: All gross sales into the state, both taxable and exempt.
- Marketplace sales: Included.
- Services: Only taxable services count toward the threshold.
Alaska
- Threshold: $100,000 in statewide gross sales in the current or previous year (local tax only); 200-transaction test removed from 1 January 2025.
- Included sales: Gross receipts from all sales into participating municipalities.
- Marketplace sales: Included.
- Exempt sales: Typically count toward the threshold in participating jurisdictions.
Arizona
- Threshold: $100,000 in gross sales in the current or previous year. No transaction test.
- Included sales: All gross sales, including taxable and exempt tangible personal property and services.
- Marketplace sales: Included.
- Services: Only count if they are taxable under Arizona law (many are exempt).
Arkansas
- Threshold: $100,000 in sales or 200 transactions in the current or previous year.
- Included sales: Gross revenue from all sales, including tangible personal property and services.
- Marketplace sales: Included.
- Exempt sales: Count toward the threshold.
California
- Threshold: $500,000 in sales of tangible personal property in the current or previous year. No transaction test.
- Included sales: Taxable sales, exempt sales, and marketplace sales all count.
- Marketplace sales: Included.
- Services: Most services are exempt, but those that are taxable do count.
Colorado
- Threshold: $100,000 in retail sales in the current or previous year. No transaction test.
- Included sales: Gross sales including taxable, exempt, and marketplace transactions.
- Marketplace sales: Count toward the threshold.
- Services: Count if taxable under state law.
Connecticut
- Threshold: $100,000 in retail sales and 200 transactions (both required) in the 12 months ending 30 September.
- Included sales: Only taxable sales of tangible goods and services.
- Marketplace sales: Included.
- Exempt sales: Excluded from the threshold calculation.
District of Columbia
- Threshold: $100,000 in retail sales or 200 separate retail sales in the current or previous calendar year.
Florida
- Threshold: $100,000 in taxable remote sales in the previous calendar year. No transaction test.
- Included sales: Only taxable retail sales of tangible goods.
- Marketplace sales: State guidance tells marketplace sellers to measure remote sales made outside the marketplace.
- Services: Generally excluded, as most services are not taxable.
Georgia
- Threshold: $100,000 in retail sales or 200 sales in the current or previous year.
- Included sales: Retail sales of tangible personal property, including exempt transactions.
- Marketplace sales: Count toward the threshold.
- Services: Count if taxable.
Hawaii
- Threshold: $100,000 in gross sales or 200 transactions in the current or previous year.
- Included sales: All gross income, including taxable and exempt sales of goods and services.
- Marketplace sales: Included.
- Services: Included.
Idaho
- Threshold: $100,000 in gross sales in the current or previous year. No transaction test.
- Included sales: Gross sales from all transactions, including both taxable and exempt goods.
- Marketplace sales: Included.
- Services: Count toward the threshold if they are taxable under Idaho law.
Illinois
- Threshold: $100,000 in gross receipts over a 12-month lookback period; 200-transaction test removed from 1 January 2026.
- Included sales: Retail sales of tangible personal property. Exempt sales are not included.
- Marketplace sales: Included.
- Services: Generally excluded, unless explicitly taxable.
Indiana
- Threshold: $100,000 in gross revenue in the current or previous year; 200-transaction test removed from 1 January 2024.
- Included sales: Gross revenue from all sales into the state, including exempt items.
- Marketplace sales: Generally excluded from the seller's own threshold; the marketplace facilitator counts them instead.
- Services: Included if taxable under Indiana law.
Iowa
- Threshold: $100,000 in gross sales in the current or previous year. No transaction test.
- Included sales: All sales into Iowa—taxable, exempt, and marketplace.
- Marketplace sales: Included.
- Services: Count if subject to Iowa sales tax.
Kansas
- Threshold: $100,000 in gross sales in the current or previous year. No transaction test.
- Included sales: Gross receipts from all sales, including exempt and wholesale sales.
- Marketplace sales: Included.
- Services: Count toward the threshold if taxable.
Kentucky
- Threshold: $100,000 in gross sales in the current or previous year; 200-transaction test removed from 1 August 2026.
- Included sales: Gross sales of tangible personal property and taxable services.
- Marketplace sales: Included.
- Services: Included if taxable under Kentucky law.
Louisiana
- Threshold: $100,000 in gross sales in the current or previous year; 200-transaction test removed from 1 August 2023.
- Included sales: Gross sales, including exempt and taxable goods.
- Marketplace sales: Excluded; only direct sales count.
- Services: Count if taxable.
Maine
- Threshold: $100,000 in gross sales in the current or previous year; 200-transaction test removed from 1 January 2022.
- Included sales: Only taxable sales of goods and services are included.
- Marketplace sales: Included.
- Exempt sales: Do not count toward the threshold.
Maryland
- Threshold: $100,000 in gross revenue or 200 transactions in the current or previous year.
- Included sales: Gross revenue from both goods and taxable services.
- Marketplace sales: Included.
- Services: Included if subject to Maryland sales tax.
Massachusetts
- Threshold: $100,000 in gross sales in the current or previous year. No transaction test.
- Included sales: Only taxable sales of tangible personal property and services.
- Marketplace sales: Included.
- Exempt sales: Excluded from the threshold calculation.
Michigan
- Threshold: $100,000 in gross sales or 200 transactions in the previous calendar year.
- Included sales: All gross sales, including exempt sales.
- Marketplace sales: Included.
- Services: Count if taxable under Michigan law.
Minnesota
- Threshold: $100,000 in retail sales or 200 retail sales in the 12 months ending with the last completed quarter.
- Included sales: Retail sales of tangible personal property, taxable and exempt.
- Marketplace sales: Included.
- Services: Count toward threshold if taxable.
Mississippi
- Threshold: $250,000 in sales over any 12-month period. No transaction test.
- Included sales: Gross sales of taxable and exempt items.
- Marketplace sales: Included.
- Services: Included if taxable.
Missouri
- Threshold: $100,000 in taxable sales over the prior 12 months, checked quarterly. No transaction test.
- Included sales: Gross receipts from all sales into the state.
- Marketplace sales: Included.
- Services: Count if taxable under Missouri law.
Nebraska
- Threshold: $100,000 in retail sales or 200 transactions in the current or previous year.
- Included sales: Retail sales of taxable goods and services.
- Marketplace sales: Included.
- Services: Included if subject to tax.
Nevada
- Threshold: $100,000 in retail sales or 200 transactions in the current or previous year.
- Included sales: Gross revenue from all retail sales, including exempt items.
- Marketplace sales: Included.
- Services: Count if taxable.
New Jersey
- Threshold: $100,000 in gross revenue or 200 transactions in the current or previous year.
- Included sales: Gross receipts from both taxable and exempt sales.
- Marketplace sales: Included.
- Services: Count if taxable under New Jersey law.
New Mexico
- Threshold: $100,000 in taxable gross receipts in the previous calendar year. No transaction test.
- Included sales: Gross receipts from all sales of goods and services, including exempt.
- Marketplace sales: Included.
- Services: Included.
New York
- Threshold: $500,000 in gross receipts and more than 100 sales (both required) in the preceding four sales tax quarters.
- Included sales: Taxable sales of tangible goods and taxable services.
- Marketplace sales: Included.
- Services: Count if taxable.
North Carolina
- Threshold: $100,000 in gross sales in the current or previous year; 200-transaction test removed from 1 July 2024.
- Included sales: Only taxable sales are included in the threshold calculation.
- Marketplace sales: Included.
- Services: Generally excluded unless taxable.
North Dakota
- Threshold: $100,000 in taxable sales in the current or previous year. No transaction test.
- Included sales: Only taxable sales of goods and services.
- Marketplace sales: Included.
- Exempt sales: Excluded.
Ohio
- Threshold: $100,000 in sales or 200 transactions in the current or previous year.
- Included sales: Gross sales, including exempt and taxable items.
- Marketplace sales: Included.
- Services: Included if taxable.
Oklahoma
- Threshold: $100,000 in taxable sales in the current or previous year. No transaction test.
- Included sales: Total sales, including exempt items and taxable services.
- Marketplace sales: Included.
- Services: Count if taxable.
Pennsylvania
- Threshold: $100,000 in gross sales in the previous calendar year. No transaction test.
- Included sales: Gross sales on all channels, including taxable and nontaxable sales.
- Marketplace sales: Excluded when the marketplace collects Pennsylvania tax for you. Direct sales count.
- Exempt sales: Count toward the threshold.
Rhode Island
- Threshold: $100,000 in gross sales or 200 transactions in the previous calendar year.
- Included sales: Retail sales of taxable goods and services.
- Marketplace sales: Included.
- Services: Included if taxable.
South Carolina
- Threshold: $100,000 in gross sales in the current or previous year. No transaction test.
- Included sales: Gross revenue from all in-state sales.
- Marketplace sales: Included.
- Services: Count if taxable.
South Dakota
- Threshold: $100,000 in gross sales in the current or previous year; 200-transaction test removed from 1 July 2023.
- Included sales: Gross sales, including taxable and exempt transactions.
- Marketplace sales: Included.
- Services: Count if taxable under South Dakota law.
Tennessee
- Threshold: $100,000 in retail sales in the previous 12 months. No transaction test.
- Included sales: Gross sales, both taxable and exempt.
- Marketplace sales: Included.
- Services: Count if taxable.
Texas
- Threshold: $500,000 in total Texas revenue in the preceding 12 calendar months. No transaction test.
- Included sales: Gross revenue from all sales into Texas, including exempt items and services.
- Marketplace sales: Included.
- Services: Count if taxable.
Utah
- Threshold: $100,000 in gross revenue in the current or previous year; 200-transaction test removed from 1 July 2025.
- Included sales: Gross sales, including exempt items and taxable services.
- Marketplace sales: Included.
- Services: Count if taxable.
Vermont
- Threshold: $100,000 in gross sales or 200 transactions in the prior four calendar quarters.
- Included sales: All gross sales, including exempt and taxable goods and services.
- Marketplace sales: Included.
- Services: Count if taxable.
Virginia
- Threshold: $100,000 in retail sales or 200 transactions in the current or previous year.
- Included sales: Gross sales, including exempt items and taxable services.
- Marketplace sales: Excluded; only direct sales count.
- Services: Count if taxable.
Washington
- Threshold: $100,000 in gross income in the current or previous year. No transaction test.
- Included sales: Gross income from all in-state sales, including exempt goods and services.
- Marketplace sales: Included.
- Services: Count if taxable.
West Virginia
- Threshold: $100,000 in gross sales or 200 transactions in the current or previous year.
- Included sales: Gross receipts from taxable and exempt sales, including services.
- Marketplace sales: Included.
- Services: Count if taxable.
Wisconsin
- Threshold: $100,000 in gross sales in the current or previous year; 200-transaction test removed from 20 February 2021.
- Included sales: Gross sales of taxable goods and services.
- Marketplace sales: Included.
- Services: Count if taxable.
Wyoming
- Threshold: $100,000 in gross sales in the current or previous year; 200-transaction test removed from 1 July 2024.
- Included sales: Retail sales, including exempt and taxable items.
- Marketplace sales: Included.
- Services: Count if taxable.
How does economic nexus apply to SaaS (Software as a Service)?
SaaS sales can count toward economic nexus thresholds even in states that don’t tax SaaS. If you sell Software as a Service (SaaS), remember that states don’t treat SaaS the same way for tax purposes. This directly affects your economic nexus obligations. For a closer look, see 2022 SaaS Tax: State-by-State Details.
- Some states treat SaaS as taxable, either as a digital good or a service. Those sales count toward the economic nexus threshold and require tax collection.
- Other states exempt SaaS. The revenue may still count toward the nexus threshold but wouldn’t trigger a tax collection obligation. The exception is if you cross the threshold and also make other taxable sales.
Examples:
- New York and Texas tax SaaS, so sales to customers in those states generally count toward both nexus thresholds and require sales tax collection.
- California generally does not tax SaaS (unless bundled with tangible goods or downloadable software), but SaaS sales still count toward the $500,000 threshold for nexus.
- Florida and Missouri do not tax SaaS and also exclude exempt services from the nexus calculation. This can be a more favorable setup for SaaS companies.
Even in states where SaaS isn’t taxable, your total sales (including SaaS) can still create nexus. That means you may need to register, file returns and report $0 tax due.
If your business sells SaaS or other digital products, make sure you:
- Verify how each state classifies and taxes SaaS.
- Track whether SaaS sales count toward economic nexus thresholds.
- Register and collect sales tax where required.
Looking for the best automated tax compliance solution for your business?
Taxually is an all-in-one VAT and sales tax automation platform designed to simplify compliance, reduce risk, and scale with your business. From registration to filing, our software automates every step—across the U.S., EU, and beyond.
Book a free call with our tax experts to see how Taxually can streamline your tax operations and help you stay fully compliant in every market.
How Taxually handles this
Taxually’s LumaTax runs a nexus analysis on your sales, helps you register in the states where you must collect, and prepares and files multi-state sales tax returns, including Canadian GST/HST. LumaTax is currently available to enterprises and accounting firms. For the full workflow, read how to automate US sales tax filing in every state.
Related guides
Frequently asked questions
What is economic nexus?
Economic nexus is a state tax rule that requires remote sellers to collect and remit sales tax once they exceed specific sales or transaction thresholds—usually $100,000 in sales. Some states also use a 200-transaction test.
Do all states calculate nexus the same way?
No. Some states count all gross sales (taxable and exempt), while others include only taxable retail sales. Understanding each state’s definition is key to compliance.
Do marketplace sales count toward nexus?
It depends on the state. Maryland, New Jersey and North Carolina count marketplace sales, while Indiana, Louisiana, Pennsylvania and Virginia generally count only your direct sales.
How does economic nexus affect SaaS businesses?
Rules vary widely. Some states tax SaaS (e.g., New York, Texas), while others don’t (e.g., Florida, Missouri). Even when untaxed, SaaS sales can still count toward nexus thresholds and trigger registration.
What are the economic nexus thresholds for each state in 2026?
Most states use $100,000 in sales in the current or previous calendar year. Alabama and Mississippi use $250,000, and California, New York and Texas use $500,000.
Which states still have a 200-transaction threshold?
As of October 2026: Arkansas, DC, Georgia, Hawaii, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey, Ohio, Rhode Island, Vermont, Virginia and West Virginia. Connecticut requires 200 transactions and $100,000 together.
Which states dropped the transaction threshold recently?
Kentucky removed it from 1 August 2026 and Illinois from 1 January 2026. Utah removed it from 1 July 2025 and Alaska's remote seller commission from 1 January 2025.
