Sales Tax Nexus by State: The 2026 Threshold Map

Pull your sales by ship-to state, line up each total against that state's threshold, and you will usually find you already have a sales tax obligation somewhere you never registered. Since the 2018 Supreme Court decision in South Dakota v. Wayfair, every state with a sales tax can require an out-of-state brand to collect once it crosses an economic threshold, most commonly $100,000 in sales into that state in a year. The exposure is retroactive to the day you crossed, not the day you found out. This is the full threshold map, the five states that do not apply, and the sequence for cleaning it up if you are already behind.

How Wayfair rewrote the rules, and why brands still get caught

For 26 years, the rule was simple: you owed sales tax in a state only if you had a physical presence there. That standard came from a 1992 Supreme Court case, Quill Corp. v. North Dakota, and it meant a catalog or online seller could ship into 40 states and collect tax in one.

South Dakota broke that on purpose. It passed a law taxing any remote seller with $100,000 in sales or 200 transactions into the state, then litigated it up to the Supreme Court to force the issue. In June 2018, the Court sided with the state in South Dakota v. Wayfair (585 U.S. 162) and killed the physical-presence requirement. Within five years, every other state with a sales tax had copied the model. Missouri, the last holdout, switched its law on in January 2023.

So this is not a new rule anyone is still phasing in. It is 8-year-old law, and the enforcement machinery has had time to mature. States increasingly cross-reference credit-card processor data, marketplace platform reports, and shipping records to find sellers who crossed a line and never registered.

The one clear trend since 2018 is simplification of the trigger itself. States have been dropping the 200-transaction prong and moving to revenue-only thresholds, because the transaction count swept in tiny sellers (a $12 candle shop doing 200 orders would trip a threshold meant for real businesses). The count of states using any transaction threshold has more than halved since the post-Wayfair peak.

When I talk to founders running a brand between $2M and $20M, the reaction is almost always the same: they knew Wayfair happened, they assumed Shopify or Amazon was handling it, and they never actually mapped their own state-by-state sales. That gap between "I thought it was covered" and "I owe back tax in nine states" is the entire problem.

The complete threshold map: what each state requires

Here is the shape of it. Most of the country sits at $100,000 in annual sales with no transaction count. Two states (California, Texas) sit at $500,000. New York is the odd one out, requiring $500,000 in sales and 100 transactions at the same time. Alabama and Mississippi sit in the middle at $250,000. And five states have no statewide sales tax at all, so there is no threshold to cross.

The threshold number is only half the picture. The measurement period matters just as much, and it is where brands miscount. Most states measure your sales over the "current or prior calendar year," which means a single sale that pushes you over in October can create an obligation retroactive to earlier in the year. A few states use a rolling 12-month window instead. When we work through this with operators, the framing that lands is that nexus is a rolling-quarters question, not a one-time check: your last few quarters of sales into a state can flip you into an obligation you then carry forward.

If you want the software layer that automates this state-by-state tracking, we compare the main tools in our guide to the best sales tax software for ecommerce.

Sales Tax Nexus Exposure Estimator

Enter your sales figures for a state below to see whether you have crossed the threshold, and get a rough back-tax estimate if you have.

The exposure math: why the clock started before you knew

This is the part that turns a compliance chore into a balance-sheet problem. Your obligation to collect runs from the day you crossed the threshold. Every taxable sale after that date, where you did not charge tax, is now a liability you owe out of your own margin, because you cannot go back and bill customers who already paid.

Work a rough example. Say you crossed $100,000 into a state early in Q1 and kept selling there all year, ending at $300,000 in taxable sales. In a state with a combined rate near 8%, the uncollected tax on the roughly $250,000 of post-crossing sales is about $20,000. Add penalties (often 10% or more) and interest, and one state you never registered in is a $22,000-plus problem. Multiply that across the eight or ten states a growing DTC brand actually sells into and the number gets serious fast. (The exact date from which back-tax liability runs varies by state: some assess from the day you crossed, others from the start of the calendar year or the first sale into the state. Confirm the specific rule before calculating your exposure.)

The rate you owe is the combined state-plus-local rate, and in the highest states that is over 10%.

The pattern we see again and again: the exposure hides on the balance sheet, not the P&L. One thing that surfaces on almost every diagnostic is sales tax being run through income instead of held as a liability, or a marketplace "sales tax collected" balance that was never remitted. In one case the collected-not-remitted balance sitting in an account was six figures, money the brand had literally taken from customers as tax and never sent to the state. That is the worst version, because states treat collected-but-not-remitted tax as close to theft, and several remove the look-back cap entirely for it.

The five no-sales-tax states, and the Alaska trap

Five states give you a clean pass. Oregon, Montana, New Hampshire, and Delaware have no statewide sales tax, so there is no economic nexus to trip and nothing to register for on sales into them. If a big share of your revenue ships to those four, that revenue simply does not carry sales tax risk.

Alaska is the asterisk. It has no state sales tax, but more than 100 local jurisdictions do levy one, administered jointly through the Alaska Remote Sellers Sales Tax Commission. A remote seller above $100,000 in Alaska sales has to collect for the participating local jurisdictions. So "Alaska has no sales tax" is true at the state level and misleading at the checkout level. Treat it as a $100,000-threshold state for planning, not a free zone.

If you are already behind: the VDA playbook

Most brands that map this out discover they have been in the hole in at least a few states for a while. There is a defined path out, and the order matters.

First, run a nexus study: pull sales by ship-to state for the last three to four years and mark every state and date where you crossed a threshold. Second, calculate the back liability using actual taxable sales (not everything is taxable, so clothing in some states or certain products may be partially exempt). Third, and this is the key move, file a Voluntary Disclosure Agreement instead of just quietly registering. A VDA is you coming forward before the state contacts you. In exchange, most states waive penalties and cap the look-back period at 3 to 4 years, even if your exposure goes back further. You can do these state by state, or file once across many states through the Multistate Tax Commission's program.

The math on this is stark. A brand that self-reports through a VDA pays capped back tax with penalties waived. A brand that gets an audit letter first pays the full back tax with no look-back cap, plus penalties, plus interest. When we've helped operators size this, the VDA route routinely saves more than it costs, sometimes by a wide margin, and it takes the "am I about to get a surprise assessment" anxiety off the table.

One hard rule: never backdate a registration to a false start date to make old exposure disappear. That is not a shortcut, it is tax fraud, and it converts a manageable civil liability into a criminal one. If you are worried enough to consider it, that is exactly the signal to file a VDA instead. Our walkthrough on how to register for sales tax across multiple states covers the registration mechanics once your remediation plan is set.

Register, file, and don't stop: the ongoing rhythm

Registering is the start, not the finish. When you register in a state, it assigns you a filing frequency (monthly, quarterly, or annual) based on your volume, and most returns are due on the 20th of the month after the period. Two rules trip people up. First, once you are registered you owe a return every period even when you had zero sales into that state, a "zero return." Miss those and you rack up late-filing penalties on $0 of tax. Second, trailing nexus: when your sales into a state drop back below the threshold, the obligation usually persists for several more months before you can cancel, so you cannot deregister the instant you dip.

The manual burden is real. Returns range from about 45 minutes for a simple state to a few hours for complex ones. Blended across a multi-state portfolio, a brand filing in 30 states by hand spends roughly 45 hours a month on sales tax before it does any nexus monitoring. That is why almost every brand at scale runs software (the comparison guide covers the options) and why the 24-state Streamlined Sales Tax program exists to let you register across member states in one filing. If you would rather stress-test where you stand before an auditor does it for you, our sales tax audit preparation guide is the next read.

Nexus is not a compliance detail you check once. It is a rolling-quarters exposure that grows silently on your balance sheet from the day you crossed a threshold. The brands that get hurt are not the ones who owe tax, everyone at scale owes tax somewhere. They are the ones who never mapped their sales by state and found out from an audit letter instead of a spreadsheet.

Related reading. For the compliance and software side of nexus, see the DTC sales-tax nexus guide and the state-by-state exposure map. For how we help brands model margin and cash, see our fractional CFO work.

Sources and methodology

Economic nexus thresholds compiled from published state tax guides. The state-by-state revenue thresholds, transaction counts, and measurement periods in the map and reference table are drawn from TaxJar's economic nexus thresholds resource, which maintains a per-state table for all US sales tax states plus D.C. This area of law changes frequently; verify a specific state's current figure before relying on it. See the TaxJar economic nexus by state guide.

The controlling case is South Dakota v. Wayfair (2018). The physical-presence standard was overturned on June 21, 2018, when the Supreme Court decided South Dakota v. Wayfair, 585 U.S. 162, replacing the 1992 Quill standard. South Dakota's own trigger ($100,000 or 200 transactions) became the template most states copied. Ruling text at Justia.

Combined tax rates from the Tax Foundation. The highest-combined-rate ranking uses the Tax Foundation's State and Local Sales Tax Rates publication (2026 edition), which combines each state's rate with its population-weighted average local rate. Louisiana leads at 10.11% (state rate 5.00% effective January 2025, combined with average local). See the Tax Foundation rates report.

The transaction-threshold trend reflects state law changes through 2026. The count of states using a transaction-count prong has fallen from its post-Wayfair peak as states including South Dakota, Louisiana, Indiana, Utah, Ohio (Aug 2019), Georgia (Jan 2020), and Illinois dropped it. The current figure is approximately 16 states; the peak figure is an approximation of the immediate post-Wayfair period. Change list documented by the Sales Tax Institute economic nexus chart.

Voluntary Disclosure Agreement terms from the Multistate Tax Commission. The multi-state VDA path, penalty waiver, and look-back mechanics are described by the MTC's National Nexus Program, which runs a single application covering multiple states. Terms and look-back caps vary by state. See the MTC Multistate Voluntary Disclosure Program.

Limitations. Threshold rules, effective dates, and marketplace-inclusion treatment vary by state and change often; several states leave the measurement period ambiguous. Product taxability (food, clothing, digital goods) can partially exempt sales and reduce liability but is not modeled here. Nothing in this post is legal or tax advice for a specific business; confirm your position with a SALT professional before registering or filing a VDA.

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