Economic Nexus Thresholds by State: 2026 Guide for Ecommerce Sellers

What Changed After South Dakota v. Wayfair

The 2018 Supreme Court decision in South Dakota v. Wayfair, Inc. (585 U.S. 162) overturned the physical presence requirement from Quill Corp. v. North Dakota (1992) and allowed states to impose sales tax collection obligations on remote sellers based on economic activity alone. Since then, all 45 states with a general sales tax (plus the District of Columbia) have enacted economic nexus laws.

Economic nexus is triggered when a seller exceeds a state's threshold for sales revenue, transaction count, or both within that state during a defined measurement period (typically the current or previous calendar year). Once triggered, the seller must register for a sales tax permit, collect sales tax on taxable transactions, and remit the collected tax to the state.

The key takeaway for ecommerce sellers is that you can have sales tax obligations in states where you have no employees, no warehouse, and no physical presence of any kind. Your sales volume alone creates the obligation. This applies to direct-to-consumer brands, B2B sellers, SaaS companies (in states that tax software), and marketplace sellers for sales that are not collected by the marketplace facilitator.

Major State Thresholds: The $100K Standard and Exceptions

The majority of states have adopted a $100,000 in gross revenue threshold, either alone or combined with a 200-transaction threshold. This follows the framework upheld in the Wayfair decision. However, several significant states use different thresholds.

California stands out with a $500,000 revenue threshold and no transaction count threshold. This higher bar means that smaller ecommerce sellers may not have nexus in California even if they would in most other states. California's threshold is set by Revenue and Taxation Code Section 6203(c)(4) and was originally higher when first enacted in 2019.

New York uses a $500,000 revenue threshold combined with a 100-transaction threshold, requiring both to be met. Texas uses $500,000 in revenue with no transaction threshold. These three large-market states effectively give smaller sellers more runway before triggering collection obligations.

At the other end, states like Kansas and North Dakota have low thresholds. North Dakota requires collection at $100,000 in revenue or 200 transactions. Alabama requires $250,000 in revenue with no transaction threshold. Mississippi and Connecticut use $100,000 in revenue or 200 transactions.

Five states have no general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. However, Alaska allows local jurisdictions to impose sales taxes, and some localities have adopted economic nexus provisions.

State-by-State Threshold Reference Table

Here is a reference of thresholds for key ecommerce states as of January 2026. Alabama: $250,000 revenue. Arizona: $100,000 revenue. California: $500,000 revenue. Colorado: $100,000 revenue. Connecticut: $100,000 revenue and 200 transactions. Florida: $100,000 revenue. Georgia: $100,000 revenue or 200 transactions. Illinois: $100,000 revenue or 200 transactions. Indiana: $100,000 revenue or 200 transactions. Massachusetts: $100,000 revenue. Michigan: $100,000 revenue or 200 transactions. Minnesota: $100,000 revenue or 200 transactions. New Jersey: $100,000 revenue or 200 transactions. New York: $500,000 revenue and 100 transactions. North Carolina: $100,000 revenue or 200 transactions. Ohio: $100,000 revenue or 200 transactions. Pennsylvania: $100,000 revenue. Tennessee: $100,000 revenue. Texas: $500,000 revenue. Virginia: $100,000 revenue or 200 transactions. Washington: $100,000 revenue.

Note that several states have eliminated their transaction-count thresholds in recent years, including California (which dropped it in 2020) and Washington (which dropped it effective January 2026). The trend is moving toward revenue-only thresholds, simplifying compliance somewhat.

Sellers should verify current thresholds with each state's department of revenue, as legislatures can and do adjust these amounts. SpryTax maintains updated threshold data for all clients using our sales tax compliance services.

How to Track and Calculate Your Nexus Exposure

Tracking nexus exposure requires aggregating sales data by destination state. Most ecommerce platforms, including Shopify, WooCommerce, BigCommerce, and Amazon Seller Central, provide state-level sales reports. However, the definition of "gross revenue" varies by state. Some states include only taxable sales, while others include all sales, including exempt transactions. Some count marketplace sales facilitated by Amazon or other platforms, while others exclude them.

We recommend building a nexus tracking spreadsheet or using automated tools such as TaxJar, Avalara, or Anrok that monitor your sales by state and alert you when you approach a threshold. Set alerts at 80% of the threshold to give yourself time to register before you trigger the obligation.

The measurement period also varies. Most states use a rolling 12-month period or a calendar year. Some use the current or previous calendar year, meaning that crossing the threshold in 2025 creates an obligation for 2026 even if your 2026 sales in that state are below the threshold.

One important nuance: once you establish nexus in a state, you generally must continue to collect and remit sales tax until you formally notify the state that you no longer meet the threshold. Nexus does not automatically terminate just because your sales drop below the threshold in a subsequent period.

Next Steps for Ecommerce Sellers

If you are an ecommerce seller with multi-state sales, here is a practical action plan. First, pull your trailing 12-month sales data by state and compare it against the current thresholds. Identify states where you have already exceeded the threshold and states where you are approaching it.

Second, for states where you have already triggered nexus, register for a sales tax permit as soon as possible. Most states allow online registration through their department of revenue website. Do not begin collecting sales tax before receiving your permit, as collecting tax without a permit can create additional issues.

Third, determine the taxability of your products in each nexus state. Not all products are taxable in all states. Clothing is exempt in Pennsylvania and New York (under $110). Food is exempt in most states. SaaS and digital products have varying taxability across states.

Fourth, implement a sales tax automation solution. Manual calculation and filing across five or more states is error-prone and time-consuming. Automated solutions integrate with your ecommerce platform, apply the correct tax rates by jurisdiction, and can auto-file returns on your behalf.

At SpryTax, our sales tax and ecommerce service handles the entire process, from nexus analysis through registration, rate configuration, and ongoing filing. We work with DTC brands, SaaS companies, and marketplace sellers across all 50 states.