Beginner Quick Answer
What is the most common economic nexus threshold?
⚡ TL;DR
$100,000 in sales OR 200 transactions is the standard, used by roughly 35 of the 45 sales-tax states. California, Texas, and New York use $500,000. New York is the most restrictive: both $500,000 AND 100 transactions must be met simultaneously. Alabama and Mississippi use $250,000.
$100,000 in sales OR 200 transactions is the standard, adopted by most states after the Wayfair decision validated South Dakota’s 2016 law. It’s the benchmark, but several high-volume states use higher thresholds.
Key takeaways
- $100,000 OR 200 transactions (current or prior calendar year) is the majority standard, used by roughly 35+ of the 45 sales-tax states
- Either condition alone triggers registration, hitting 200 small transactions over $100K total still requires registration, as does $100K in sales with only a handful of transactions
- Exceptions above $100K: California, Texas, and New York use $500,000 (5× the standard); Alabama and Mississippi use $250,000
- New York uses AND, not OR: both $500,000 in sales AND 100+ transactions must be met simultaneously: the most restrictive major threshold in the US
- Transaction-count-only states: a few states dropped the transaction count entirely (Colorado, South Carolina, Tennessee, others) — sales dollars alone determine nexus
- The thresholds measure sales into the state, not total revenue, global or national revenue doesn’t count, only what’s shipped or sourced to that state’s customers
Frequently asked questions
What is the most common economic nexus threshold?
$100,000 in sales OR 200 transactions into a state in the current or prior calendar year is the most common threshold. The majority of the 45 sales tax states use this standard, which originated with South Dakota's 2016 nexus law and was upheld by the Supreme Court in South Dakota v. Wayfair (2018). Several states vary from this standard — California, Texas, and New York use $500,000; New York requires both conditions (AND, not OR); Alabama and Mississippi use $250,000.
Is the threshold the same in every state?
No. Most states use $100,000 or 200 transactions, but several states differ. California, Texas, and New York use $500,000. New York requires both $500,000 AND 100 transactions to be met simultaneously. Alabama and Mississippi use $250,000. Some states (like South Carolina and Tennessee) use $100,000 only with no transaction count. Colorado removed its transaction threshold entirely.
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