Do you owe sales tax in states you've never been to?

Possibly, if you sell enough into them.

This catches online sellers badly, because the obligation attaches to sales volume rather than to physical presence.

What changed

A state can require you to collect its sales tax based on economic activity alone — sales revenue, transaction count, or both — with no office, no warehouse, and no employees there.

Not "most states." Every state with a sales tax now has an economic nexus law. The five without a state sales tax are New Hampshire, Oregon, Montana, Alaska, and Delaware — and Alaska is a partial exception, because local jurisdictions there collect through a remote seller commission even though the state doesn't.

The number to know

In the large majority of states, the dollar threshold is $100,000 in annual sales into that state. Of the roughly 45 jurisdictions enforcing economic nexus, about 41 use that figure.

The exceptions run higher, not lower. California, Texas, and New York all sit at $500,000.

So the working assumption is $100,000 per state, per year — and the states where you're most likely to have real volume are the ones that give you the most room.

The rules have been moving in your favor

This is the part most articles on this topic haven't caught up with.

The original model — borrowed from South Dakota, whose law the Supreme Court blessed in 2018 — was $100,000 in sales or 200 separate transactions. That second trigger was brutal for anyone selling low-priced goods. A seller shipping $14 phone cases hits 200 transactions on about $2,800 of revenue, and that's enough to create a registration and a permanent filing obligation over an amount of tax that costs more to calculate than to pay.

States figured out the math didn't work for them either. As of August 1, 2026, seventeen states have eliminated the transaction-count threshold entirely. Illinois dropped it on January 1, 2026. Kentucky dropped it on August 1, 2026. Thirteen states never adopted one. A transaction threshold still exists in fourteen states plus Puerto Rico and the District of Columbia, and more repeals are expected.

If you sell inexpensive items in volume, this is the single most important thing to re-check. A state that had you three years ago may not have you now.

"Or" versus "and"

Almost every state with both tests uses or. Either condition alone pulls you in.

Two states use and, meaning you must cross both: New York, at more than $500,000 and more than 100 transactions, and Connecticut, at $100,000 and 200 transactions.

This gets misread constantly. People see New York's $500,000 and assume the big states are lenient. New York isn't lenient because of the dollar figure — it's lenient because of the conjunction. Assume every other state works the same way and you'll be wrong about all of them.

Why it surprises people

You sell online, ship everywhere, and never think about it. Then you cross a threshold in a state you've never visited and you have a registration and collection obligation there.

The obligation generally runs forward from when you cross, though registration timing varies — some states want you registered almost immediately, others by the start of the next filing period.

Either way, discovering it two years late means back tax you never collected from customers and now owe yourself.

What actually counts toward the threshold

More than you'd think.

In many states, exempt sales count. You can have no taxable sales into a state and still cross its threshold, which means registering and filing returns that report zero tax due.

The measurement window varies too. Most states look at the current or previous calendar year. A few use a rolling twelve months. Connecticut measures the twelve months ending September 30.

So "did I cross $100,000 there" is a more complicated question than it sounds, and the answer depends on which state is asking.

Marketplace sales are treated differently

If you sell through Amazon, Etsy, Walmart, or eBay, the marketplace generally collects and remits on the sales that flow through it. That part is handled.

The trap is what those sales do to your own threshold. Many states count marketplace-facilitated sales toward your personal nexus threshold even though you never touched the tax.

Concretely: you sell $70,000 through your own site and $35,000 through Amazon into a $100,000 state. You've crossed. Amazon covered the Amazon sales. You must now register and collect on the direct sales yourself.

Whether marketplace sales count is genuinely inconsistent across states, and it's the area where the published charts disagree with each other most. Confirm it against the state, not against a vendor's summary table.

FBA is a different problem entirely

If a marketplace stores your inventory in a state, that's physical presence. There's no threshold to cross and no volume test to fail. It attaches the moment the inventory lands.

Sellers using fulfillment networks often have physical nexus in states they've never heard of, created by a routing decision they didn't make and can't see.

What isn't the same thing

Sales tax nexus is separate from income tax nexus, and both are separate from whether you must register with the Secretary of State.

You can owe sales tax somewhere you're not registered to do business, and vice versa.

Three different questions, three different answers, and people routinely assume one answer covers all three.

What actually helps

Software that tracks thresholds by state as you sell. Most e-commerce platforms integrate with it, and it's much cheaper than a voluntary disclosure later.

What it won't do is tell you whether your product is taxable in a given state, or resolve the marketplace question. Those still take judgment.

What to do

Pull your sales by state for the last two years — gross, not just taxable, and separated by channel.

Compare against current thresholds.

If you've crossed any, address it. Voluntary disclosure programs generally offer better terms than being found.

This is general information, not legal advice for your situation. If you want an answer for your business, book a consultation.