Economic Nexus by State: What You Need to Know

Understanding economic nexus is critical for any business making remote sales across state lines in the U.S. Since the South Dakota v. Wayfair, Inc. decision, states have implemented laws requiring out-of-state sellers to collect and remit sales tax once they exceed 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, and some specifically exclude exempt or resale sales. Whether you’re selling physical products, digital goods, or services, knowing what counts is key to maintaining compliance.

Below is a state-by-state sales tax guide that breaks down the economic nexus threshold and identifies which types of sales are included in the calculation, including rules for marketplace sales and services.

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, Pennsylvania).
• Marketplace sales are almost always included: Regardless of whether you sell directly or through platforms like Amazon, marketplace sales typically count toward nexus thresholds.
• 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.

State-by-state economic nexus thresholds & included sales

Alabama

• Threshold: $250,000 in gross sales.
  
  
• 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 (only applies in local jurisdictions that have adopted remote seller rules).
  
  
• 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.
  
  
• 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 or 200 transactions annually.
  
  
• 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 cumulative gross receipts.
  
  
• 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.
  
  
• 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 and 200 transactions.
  
  
• Included sales: Only taxable sales of tangible goods and services.
  
  
• Marketplace sales: Included.
  
  
• Exempt sales: Excluded from the threshold calculation.
  

Florida

• Threshold: $100,000.
  
  
• Included sales: Only taxable retail sales of tangible goods.
  
  
• Marketplace sales: Included.
  
  
• Services: Generally excluded, as most services are not taxable.
  

Georgia

• Threshold: $100,000 or 200 transactions.
  
  
• 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 or 200 transactions.
  
  
• Included sales: All gross income, including taxable and exempt sales of goods and services.
  
  
• Marketplace sales: Included.
  
  
• Services: Included.

Idaho

• Threshold: $100,000.
  
  
• 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 or 200 transactions.
  
  
• 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.
  
  
• Included sales: Gross revenue from all sales into the state, including exempt items.
  
  
• Marketplace sales: Included.
  
  
• Services: Included if taxable under Indiana law.
  

Iowa

• Threshold: $100,000.
  
  
• 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.
  
  
• 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 or 200 transactions.
  
  
• 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 or 200 transactions.
  
  
• Included sales: Gross sales, including exempt and taxable goods.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Maine

• Threshold: $100,000 or 200 transactions.
  
  
• 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 or 200 transactions.
  
  
• 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.
  
  
• 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 or 200 transactions.
  
  
• Included sales: All gross sales, including exempt sales.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable under Michigan law.
  

Minnesota

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Retail sales of tangible personal property, taxable and exempt.
  
  
• Marketplace sales: Included.
  
  
• Services: Count toward threshold if taxable.
  
  

Mississippi

• Threshold: $250,000.
  
  
• Included sales: Gross sales of taxable and exempt items.
  
  
• Marketplace sales: Included.
  
  
• Services: Included if taxable.
  

Missouri

• Threshold: $100,000.
  
  
• Included sales: Gross receipts from all sales into the state.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable under Missouri law.
  

Nebraska

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Retail sales of taxable goods and services.
  
  
• Marketplace sales: Included.
  
  
• Services: Included if subject to tax.
  

Nevada

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Gross revenue from all retail sales, including exempt items.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

New Jersey

• Threshold: $100,000 or 200 transactions.
  
  
• 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.
  
  
• Included sales: Gross receipts from all sales of goods and services, including exempt.
  
  
• Marketplace sales: Included.
  
  
• Services: Included.
  

New York

• Threshold: $500,000 and 100 transactions.
  
  
• Included sales: Taxable sales of tangible goods and taxable services.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

North Carolina

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Only taxable sales are included in the threshold calculation.
  
  
• Marketplace sales: Included.
  
  
• Services: Generally excluded unless taxable.
  

North Dakota

• Threshold: $100,000.
  
  
• Included sales: Only taxable sales of goods and services.
  
  
• Marketplace sales: Included.
  
  
• Exempt sales: Excluded.
  

Ohio

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Gross sales, including exempt and taxable items.
  
  
• Marketplace sales: Included.
  
  
• Services: Included if taxable.
  

Oklahoma

• Threshold: $100,000.
  
  
• Included sales: Total sales, including exempt items and taxable services.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Pennsylvania

• Threshold: $100,000.
  
  
• Included sales: Gross sales of taxable goods only.
  
  
• Marketplace sales: Included.
  
  
• Exempt sales: Excluded.
  

Rhode Island

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Retail sales of taxable goods and services.
  
  
• Marketplace sales: Included.
  
  
• Services: Included if taxable.
  

South Carolina

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Gross revenue from all in-state sales.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

South Dakota

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Gross sales, including taxable and exempt transactions.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable under South Dakota law.
  

Tennessee

• Threshold: $100,000.
  
  
• Included sales: Gross sales, both taxable and exempt.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Texas

• Threshold: $500,000.
  
  
• 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 or 200 transactions.
  
  
• Included sales: Gross sales, including exempt items and taxable services.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Vermont

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: All gross sales, including exempt and taxable goods and services.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Virginia

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Gross sales, including exempt items and taxable services.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Washington

• Threshold: $100,000.
  
  
• 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 or 200 transactions.
  
  
• Included sales: Gross receipts from taxable and exempt sales, including services.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Wisconsin

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Gross sales of taxable goods and services.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.
  

Wyoming

• Threshold: $100,000 or 200 transactions.
  
  
• Included sales: Retail sales, including exempt and taxable items.
  
  
• Marketplace sales: Included.
  
  
• Services: Count if taxable.

Don’t forget about SaaS (Software as a Service)

If you sell Software as a Service (SaaS), it’s important to understand that states don’t treat SaaS uniformly for tax purposes, and this directly affects your economic nexus obligations.

• Some states treat SaaS as taxable, either as a digital good or a service, meaning those sales count toward the economic nexus threshold and require tax collection.
  
  
• Other states exempt SaaS, so the revenue may still count toward the nexus threshold but wouldn’t trigger a tax collection obligation — unless 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, which is potentially a more favorable setup for SaaS companies.

Even in states where SaaS isn’t taxable, your total sales (including SaaS) can still establish nexus. That means you may be obligated 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.

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