Key takeaways
- New Jersey plans to remove the 200-transaction threshold and base sales tax nexus solely on $100,000 in gross revenue.
- The change aims to simplify sales tax compliance and eliminate loopholes that allow high-value sellers to avoid tax obligations.
- A revenue-only model promotes fairness, reduces administrative burdens, and aligns with broader efforts to standardize U.S. sales tax laws.
In short: New Jersey has proposed dropping its 200-transaction test for sales tax economic nexus. Remote sellers would then owe New Jersey sales tax only once their gross revenue in the state passes $100,000. The change aims to make compliance simpler for small sellers and close a loophole used by high-value sellers.
Update (October 2026): New Jersey has not yet dropped the 200-transaction test. The Division of Taxation still applies both tests: delivery revenue above $100,000, or 200 or more separate transactions, in the current or prior calendar year. Illinois has gone ahead and removed its 200-transaction test from January 1, 2026.
New Jersey’s recent proposal would remove the 200-transaction threshold for economic nexus. It reflects a growing push to make sales tax compliance simpler. Businesses would no longer need to track both revenue and transaction counts. Instead, the state would base tax duties on gross revenue alone. That ties tax policy to real economic activity.
States brought in the 200-transaction rule after South Dakota v. Wayfair, but it has not worked well. Small businesses face needless complexity. Meanwhile, high-value sellers can avoid tax by keeping their sales count under the limit. New Jersey’s $100,000 revenue-only threshold would close this loophole. The result would be a fairer and simpler system.
A revenue-only model cuts admin work for businesses. It also helps states collect tax fairly. Today’s patchwork of state-by-state thresholds raises compliance costs and disrupts trade between states. Standard sales tax laws could make life easier for businesses, especially in the digital economy.
States are under pressure to secure stable revenue. Expect more legislatures to review their nexus rules in 2025.
What counts towards New Jersey’s $100,000 threshold?
All retail sales delivered into New Jersey count, including sales that are not taxable. Sales for resale do not count.
- Nontaxable sales count: gross revenue includes nontaxable retail sales of goods and specified digital products.
- Every channel counts: if you sell through your own website and through marketplaces, you must add both together.
- Resale is excluded: a seller that only makes sales for resale, or only nontaxable retail sales, does not have to register.
Here is why the transaction test matters. A seller ships 250 orders of $40 into New Jersey in a year. That is only $10,000 of revenue, but 250 transactions passes the 200 test. Under current rules, the seller must register. Under a revenue-only rule, it would not.
What happens after you cross the New Jersey threshold?
You must start collecting tax on taxable sales made after you cross the threshold. The sale that takes you over the line is not taxed.
- Grace period: the Division of Taxation allows up to 30 calendar days to register and start collecting.
- Registration: register online and choose “Register as Remote Seller Only”, or use the Streamlined Sales Tax Registration System.
- Marketplace-only sellers: marketplace facilitators collect tax on marketplace sales. Sellers above the threshold must still register, but can ask for non-reporting status with Form C-6205-ST.
What does this mean for remote sellers?
Until New Jersey changes its law, remote sellers must keep tracking both their revenue and their number of transactions into the state. Crossing either test means registering and collecting New Jersey sales tax.
Other states have already moved to revenue-only thresholds:
- South Dakota: dropped its 200-transaction test from July 1, 2023, leaving a $100,000 sales test.
- Illinois: dropped its 200-transaction test from January 1, 2026, leaving a $100,000 gross receipts test, according to the Illinois Department of Revenue.
If you sell into several states, review each state's thresholds at least once a year. Our guide to sales tax rates by state gives an overview of state and local rates.
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 New Jersey’s new proposal for sales tax nexus?
New Jersey has proposed eliminating the 200-transaction threshold for sales tax nexus, meaning tax obligations would be based solely on $100,000 in gross revenue. This change aims to simplify sales tax compliance and align tax collection with real business activity.
How will removing the 200-transaction threshold affect small businesses?
If approved, the revenue-only nexus rule will make compliance easier for small businesses by removing the need to track transaction counts. It also ensures that only businesses with significant economic activity in New Jersey are required to collect and remit sales tax.
Does New Jersey still use the 200-transaction threshold?
Yes, as of October 2026. Remote sellers must collect New Jersey sales tax if their delivery revenue exceeds $100,000. The same applies if they make 200 or more separate transactions in the current or prior calendar year.
Which states have dropped the 200-transaction threshold?
South Dakota dropped it from July 1, 2023, and Illinois from January 1, 2026. Both now use a $100,000 sales test only.
Do marketplace sales count towards New Jersey’s economic nexus threshold?
Yes. Sales through marketplaces count, and a seller using both its own website and marketplaces must add them together.
How long do remote sellers have to register in New Jersey after crossing the threshold?
The Division of Taxation allows up to 30 calendar days to register and begin collecting. Tax applies to taxable sales made after the threshold is met.
Do nontaxable sales count towards New Jersey’s threshold?
Yes. Gross revenue includes nontaxable retail sales of goods and specified digital products. Sales for resale do not count.
