Sales Tax Nexus Guide for E-Commerce — State Rules After Wayfair (2026)

Quick Answer

After the 2018 South Dakota v. Wayfair Supreme Court decision, states can require online sellers to collect sales tax even without physical presence. Most states now have economic nexus thresholds — typically $100,000 in sales or 200 transactions per year.

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What is Sales Tax Nexus?

Nexus is a sufficient connection between a business and a state that requires the business to collect and remit sales tax. There are two types:

Physical Nexus

• Office, warehouse, or store in the state
• Employees working in the state
• Inventory stored in the state (including FBA warehouses!)
• Attending trade shows

Economic Nexus (Post-Wayfair)

• Exceeding the state's sales threshold
• Based on gross sales or number of transactions into the state
• No physical presence required

Economic Nexus Thresholds by State (2026)

| State | Sales Threshold | Transaction Threshold | |---|---|---| | California | $500,000 | — | | New York | $500,000 | 100 transactions | | Texas | $500,000 | — | | Florida | $100,000 | — | | Pennsylvania | $100,000 | — | | Illinois | $100,000 | 200 transactions | | Most other states | $100,000 | 200 transactions | | No sales tax | AK, DE, MT, NH, OR | — |

⚠️ Amazon FBA Sellers: Inventory stored in Amazon fulfillment centers creates physical nexus in those states, regardless of economic nexus thresholds!

Marketplace Facilitator Laws

Most states now require marketplace facilitators (Amazon, eBay, Etsy, Walmart) to collect and remit sales tax on behalf of third-party sellers. This means:

• If you ONLY sell through marketplaces → the marketplace handles sales tax
• If you sell through your own website → YOU must handle sales tax
• If you sell through both → mixed responsibility

Steps to Sales Tax Compliance

1. Determine nexus — Where do you have physical or economic nexus?
2. Register — Get sales tax permits in nexus states
3. Configure collection — Set up your e-commerce platform to collect correct rates
4. File returns — Monthly, quarterly, or annually per state requirements
5. Remit tax — Pay collected taxes to each state

Frequently Asked Questions

Do I need to collect sales tax in every state?

No — only in states where you have nexus (physical or economic). If you're below the threshold in a state, you don't need to collect there. Five states have no sales tax at all.

What about SaaS and digital products?

Tax rules for digital products vary significantly by state. Some states tax all digital goods, some tax only certain categories, and some don't tax digital products at all. Check each state's specific rules.

What software helps with sales tax compliance?

Popular options: TaxJar, Avalara, Vertex. These integrate with e-commerce platforms and automate rate calculation, collection, filing, and remittance across all states.