Economic Nexus Thresholds by State 2026

Seven years after the Supreme Court's Wayfair decision, economic nexus is not a gray area anymore. It is a wall of 45 separate thresholds, each measured per state, most set at $100,000 in sales, and a meaningful chunk still carrying a 200-transaction trip-wire that catches low-AOV brands long before they hit six figures of revenue in a state.

This is the reference. Below is every threshold tier, the states that have dropped the transaction count, what actually counts toward the number, and how to monitor it so a state never maps your footprint before you do. If you sell $15 supplements or $25 socks across the country, read the transaction-test section twice.

The 2026 threshold landscape in one number: $100,000

Of the 45 US jurisdictions that enforce economic nexus in 2026 (49 states plus DC, minus the four with no sales tax: New Hampshire, Oregon, Montana, and Delaware), 41 set the dollar test at $100,000 in annual in-state sales. That is the number to memorize. Everything else is a variation on it. Alaska is the asterisk: it has no statewide sales tax but enforces at the local level through the Alaska Remote Seller Commission, so depending on how you count it you will see the enforcing-jurisdiction tally quoted as 45 or 46.

Five jurisdictions give you more breathing room with higher thresholds, and that matters because California, Texas, and New York are three of the largest consumer markets in the country.

When I talk to founders running a brand this size, the first instinct is almost always to think in one national revenue number. That is the wrong lens, and it is the single most expensive mistake in this whole topic. Nexus is by state, not federal, and the test is a rolling window: if your trailing few quarters into a given state cleared the line, you have nexus there now, and you have to file there now. The map below is what you are actually monitoring against, state by state.

The high-threshold states that buy you room

Five jurisdictions sit above the standard $100,000. Three are at $500,000 (California, Texas, New York) and two are at $250,000 (Alabama, Mississippi). These are the states where you can do real volume before you trip the dollar test, which makes them the exception worth knowing cold.

The catch on California is real: at $500,000 it looks generous, but California explicitly counts your marketplace-facilitated sales toward that total per the CDTFA. So $300K of direct Shopify sales plus $250K of Amazon FBA into California puts you over the line, even though your store alone never would.

New York and Connecticut are the genuine outliers on logic. They are the only two states with a true AND test. New York needs more than $500,000 in sales AND more than 100 transactions; Connecticut needs $100,000 AND 200 transactions. Everywhere else with a dual test uses OR, which means either condition alone pulls you in. The older shorthand that "New York is the only AND state" is wrong: Connecticut is the second one, and the difference matters because an AND test is much harder to trip than an OR test at the same numbers.

The transaction test is the one that actually hurts

The $100,000 dollar test is intuitive. The 200-transaction test is the one that surprises founders, because it ignores revenue entirely. In a state with a $100K-or-200-transaction OR test, a brand selling a $25 product crosses nexus at $5,000 of sales into that state. That is 200 orders, not $100,000. The test counts transactions, not units, so a brand with multi-unit carts trips it slower than a one-product-per-order example implies, but for most low-AOV DTC brands one order is roughly one product anyway.

Here is the math that reframes the whole problem for low-AOV brands. The 200-transaction line gets crossed at a tiny fraction of the dollar line:

The pattern we see again and again: a brand doing $2M nationally with a $25 AOV is convinced it only owes in a handful of big states, and then the per-state pull shows nexus in a dozen-plus states purely on order count. At a $30 AOV, 200 orders is about $6,000 of in-state sales, nowhere near the $100K dollar test. National revenue tells you nothing about that.

The good news is that the transaction test is slowly disappearing. Eighteen jurisdictions still run it; 28 are now sales-only. (Sources vary on the exact count; this 18 is derived directly from the per-state table below.)

The repeals are recent and ongoing. Illinois dropped its transaction test January 1, 2026, Kentucky drops it August 1, 2026, Utah dropped it July 1, 2025, and Indiana January 1, 2024. North Dakota, California, and Massachusetts were among the earliest. The states that still keep the transaction test are exactly the ones that pull low-AOV brands into compliance first, so they deserve the closest watch.

What actually counts toward the threshold

The number you measure is not always your gross store revenue into a state. Three rules decide what counts:

• Marketplace sales: split by state. Most states (California, Connecticut, Kansas, and the majority) count your Amazon and Walmart sales toward your seller threshold even though the facilitator collects the tax. A minority exclude them, including Arizona, Alabama, Louisiana, Maine, Massachusetts, Mississippi, and Oklahoma. This is the least consistent column across sources, so treat the include/exclude lists as examples and confirm the borderline states against each DOR.
• Lookback window: usually current or prior year. Most states measure against the current OR the immediately preceding calendar year. Some use prior-year-only (Alabama, Florida, Iowa, Pennsylvania, Rhode Island), and a few use a rolling or special period (Illinois preceding 12 months, Connecticut 12 months ending September 30, New York preceding four tax quarters). A blowout Q4 can trigger nexus that carries into the following year even if sales normalize.
• Gross vs. taxable vs. retail. A handful of states count gross sales (including exempt and wholesale), while others count only retail or only taxable sales. When in doubt, measure against gross. It is the most conservative read and keeps you ahead of any assessment.

One operator aside that trips people up constantly: the sales tax you collect is not revenue. It is a balance-sheet liability you are holding for the state, not income on your P&L. When we see a brand booking collected tax as revenue, the whole margin picture is distorted until we move it. Worth fixing before you ever get to the nexus question.

Physical nexus overrides all of this. If Amazon FBA stores even one pallet of your inventory in a state, you have physical nexus there regardless of revenue. The thresholds in this guide protect you from low-revenue economic-nexus states; they do nothing for a state where you hold inventory. The cold-open we hear most often is a founder who moved a warehouse or switched 3PLs and only later realized it created a sales-tax obligation in a new state they had never thought about.

Every state's threshold (the full table)

This is the canonical 2026 reference. Compare each state against both its dollar test and its transaction test, and remember the logic column: OR means either condition triggers, AND (New York and Connecticut only) means you need both.

What to do about it

1. Pull sales by ship-to state for the trailing 12 months. Not by billing address, by ship-to. That is what the thresholds key off.
2. For each state, compare against BOTH its dollar test and its transaction test. Flag any state where you are within 80% of either number.
3. Add your marketplace (Amazon, Walmart) sales into the seller-threshold states that count them, then re-check those states with the combined number.
4. Check for physical nexus separately. List every state where a 3PL or FBA holds your inventory. Those override the thresholds entirely.
5. Register where you have already crossed, working highest-liability states first. Most states give you 30 to 90 days from crossing before liability accrues.
6. Set a monthly recurring review. This is a monitoring problem, not a one-time project.
7. If you have already crossed thresholds and not collected, look at a voluntary disclosure agreement before a state letter arrives. It typically caps lookback at 3 to 4 years and waives penalties.

This is mostly a software-babysitting job, and that is the honest framing we give founders. If you run Avalara or TaxJar, someone still has to look in there regularly, reconcile it to what the tool thinks is happening, and flag when a number looks weird. A useful sanity check is your collected-tax-to-sales ratio: most brands land around 7 to 8% of sales, so when a state shows 17% something is misconfigured.

The exit angle is the one that costs the most if you ignore it. When a buyer's quality-of-earnings team runs diligence, they re-run the nexus analysis, find the states you never registered in, and the unremitted liability comes straight off the deal. Cleaning up nexus while you are small is cheap. Cleaning it up under a QofE microscope, with years of unremitted tax stacked up, is not.

Sources and methodology

Economic nexus thresholds are statutory, not measured, so there is no government statistical series (no BLS, FRED, or Census series) for this topic. The primary sources are the Sales Tax Institute "Economic Nexus State by State Chart," Avalara's "State-by-State Guide to Economic Nexus Laws," Numeral's 2026 handbook, and individual state Department of Revenue pages, current as of June 2026.

The 45-jurisdiction count reflects 49 states plus DC minus the four with no statewide sales tax (New Hampshire, Oregon, Montana, Delaware). Alaska is treated as no-statewide-tax here, though it enforces at the local level through the Remote Seller Commission; counting Alaska's local regime gives an alternate tally of 46 enforcing jurisdictions. Either framing is defensible as long as the Alaska treatment is stated.

From the per-state table, the derived counts are: 41 jurisdictions at the $100,000 dollar test, two at $250,000 (Alabama, Mississippi), three at $500,000 (California, Texas, New York), 18 jurisdictions still running an active transaction-count test, and 28 now sales-only. Tennessee is shown at $100,000, having lowered its threshold from $500,000 effective October 1, 2020.

Effective dates were verified for the named transaction-test repeals: Illinois (January 1, 2026), Kentucky (August 1, 2026), Utah (July 1, 2025), Alaska (January 1, 2025), Indiana (January 1, 2024), Louisiana (August 1, 2023), Massachusetts (October 1, 2019), and North Dakota (December 31, 2018).

The marketplace-inclusion column is the least consistent field across sources, so the include and exclude lists in this guide are presented as examples rather than an exhaustive census. Where a column was ambiguous, we took the more conservative read (assume marketplace sales count, assume gross sales) and flagged it for confirmation against the state DOR.

For the full strategic picture of how nexus and pricing fit together, start with our ecommerce pricing strategy guide.

Frequently asked questions