Types of Sales Tax Nexus

 

Physical Nexus: Seller has physical presence in the state: office, warehouse, business registration, owners, even remote employees.

Economic Nexus: Seller meets a set level of annual sales or gross receipts activity within a state. Economic thresholds start at $100K in annual sales and/or 200 annual transactions, but differ by state. No physical presence required. Learn more here.

Click-through Nexus: Seller meets sales threshold in a state from the activities of an in-state referral agent.

Affiliate Nexus: Remote retailer holds substantial interest in, or is owned by, an in-state retailer that sells the same or similar line of products under the same or similar name.

Cookie Nexus: Nexus created by installing data packets on instate computers.

Marketplace Nexus: Marketplace facilitators may be required to collect and remit sales tax instead of the individual seller if it operates its business in a state and provides e-commerce infrastructure, customer service, payment processing services, and marketing.

Third-party Nexus: Activities of third-party create nexus if they are helping to establish or maintain a market.

  • Installations
  • Implementations
  • Training
  • Performance or services
  • Sales
  • Customer service
  • Collection
  • Credit checking

For more help understanding sales tax nexus and compliance, download our 10 Steps to Ensure Sales Tax Doesn’t Burn Down Your Business.