Get Maximum Sales Tax Thresholds And What They Mean For You

Many states consider a business to have economic nexus when it has 200 sales transactions or $100,000 in sales revenue annually in their jurisdiction.

Legal Definition nexus. noun. nex·​us ˈnek-səs. plural nexuses or nexus -səs, -ˌsüs. : a connection or link between things, persons, or events especially that is or is part of a chain of causation.

In this article, we will go over what nexus means and its three types: physical, economic, and affiliate. Further, we will go over the history and related case law that impacts nexus meanings and how states determine if you have one.

Sales tax nexus is a term used to describe the connection between a business and state or local government that triggers the requirement to collect and remit sales tax. It is the minimum threshold of activity that a business must have in a state before it is obligated to collect and remit sales tax in that state.

Economic Nexus legislation generally requires an out-of-state retailer to collect and remit sales tax once the retailer meets a set level of sales transactions or gross receipts activity (a threshold) within the state. No physical presence is required.

In most states, the threshold for economic nexus is $100,000 in sales or 200 transactions over 12 months. There are exceptions, though; for example, in Texas and California the threshold is $500,000.

You must comply with all customs and immigration laws, regulation and rules or any other laws, regulations and rules that are enforced by either CBSA or US CBP. You must not let another person use your NEXUS Card. You must not cross the border by car in a NEXUS lane with passengers who are not NEXUS Card members.

States cannot just impose income tax on a business whenever they want to; first there has to be a connection, called nexus, between the business and the state. In many states, there will be income tax nexus if the business has substantial economic activity there. Most of the time, physical presence is not needed.