Freeman Law

The Supreme Court of the United States’ decision in Wayfair, in June 2018, changed the landscape for sales and use taxes nexus for on-line retailers and remote sellers.  Due to budgetary deficits the states are facing due to the downturn in the economy and the Covid-19 Pandemic, states will increase audit activity to raise money.  Companies must be prepared and be proactive in order to avoid or reduce any state tax assessments.

The Wayfair decision lowered the bar in which a company has nexus with a state.   Prior to Wayfair, a company needed a physical presence in the state to be required to collect and remit sales and use taxes.  After Wayfair, states now require an economic presence, generally based on a threshold of sales into the state to create nexus with the state.  Please note, even if a company does not meet the economic thresholds for sales or transactions, as the case may be, but has a physical presence in the state, then the company has nexus with the state because of the physical presence and must register for sales and use taxes in such state.

As a result of the Wayfair decision, all states that impose a sales and use tax, except Florida and Missouri, have adopted an economic nexus standard.  The economic threshold for each state is reflected below. Note that Alaska, Delaware, New Hampshire, Oregon, and Montana do not impose a state sales and use tax.

There are a lot of questions regarding the thresholds amounts by each state.  For example, are all sales counted, gross sales, or just taxable sales?  Do I include sales in which the product is being resold by my customer?   Do I include sales of my product that are made through marketplace facilitators or just direct sales to customers?

States have different meanings on what sales are included in the thresholds.  Freeman Law can help taxpayers navigate state tax laws.

State-By-State Economic Nexus Thresholds

States Economic Thresholds
Alabama Remote Sellers and Marketplace Facilitators

$250,000

Arizona Remote Sellers

$200,000 (2019); $150,000 (2020);

$100,000 (2021)

Marketplace Facilitators

$100,000

Arkansas Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

California Remote Sellers and Markplace Facilitators

$500,000

Colorado Remote Sellers and Markplace Facilitators

$100,000

Connecticut Remote Sellers

$100,000 and 200 transactions

Marketplace Facilitators

$250,000

District of Columbia Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Florida N/A
Georgia Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Hawaii Remote Sellers and Markplace Faciliators

$100,000 or 200 Transactions

Idaho Remote Sellers and Markplace Faciliators

$100,000

Illinois Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Indiana Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Iowa Remote Sellers and Marketplace Facilitators

$100,000

Kansas No Minimum Thresholds
Kentucky Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Louisiana Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Maine Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Maryland Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Massachusetts Remote Sellers and Marketplace Facilitators

$100,000

Michigan Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Minnesota Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Mississippi Remote Sellers and Marketplace Facilitators

$250,000

Missouri N/A
Nebraska Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Nevada Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

New Jersey Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

New Mexico Remote Sellers and Marketplace Facilitators

$100,000

New York Remote Sellers and Marketplace Facilitators

$500,000 and 100 Transactions

North Carolina Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

North Dakota Remote Sellers and Marketplace Facilitators

$100,000

Ohio Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Oklahoma Remote Sellers and Marketplace Facilitators

$100,000

Pennsylvania Remote Sellers and Marketplace Facilitators

$100,000

Rhode Island Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

South Carolina Remote Sellers and Marketplace Facilitators

$100,000

South Dakota Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Tennessee Remote Sellers and Marketplace Facilitators

$100,000

Texas Remote Sellers and Marketplace Facilitators

$500,000

Utah Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Vermont Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Virginia Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Washington Remote Sellers and Marketplace Facilitators

$100,000

West Virginia Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Wisconsin Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

Wyoming Remote Sellers and Marketplace Facilitators

$100,000 or 200 Transactions

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