Sales-Tax Nexus Checker

Sales-tax nexus is the connection between your business and a state that legally obliges you to register, collect, and remit that state's sales tax. For years it meant physical presence, an office, a warehouse, an employee. Then a 2018 Supreme Court decision changed everything, and today you can owe sales tax in a state you've never set foot in, simply because you sell enough there. The checker above flags where you likely have an obligation. This guide explains the rules so you stop guessing.

Two kinds of nexus: physical and economic

Physical nexus is the old rule and still applies. You have it in any state where you have a tangible footprint: an office or store, employees or contractors, or inventory stored there. That last one catches a huge number of online sellers, if you use Amazon FBA or a third-party fulfillment network, your goods may sit in warehouses across a dozen states, and each one can create physical nexus on its own, no matter how little you sell there.

Economic nexus is the newer rule from the South Dakota v. Wayfair decision. It says a state can require you to collect sales tax once your sales into that state cross a threshold, even with zero physical presence. The most common threshold is $100,000 in sales or 200 separate transactions in a year, but the details vary by state, some use only a dollar figure, some have higher limits, and the numbers shift over time.

Why nexus matters so much

When you have nexus in a state and don't register, you're still liable for the tax you should have collected, plus penalties and interest. Unlike income tax, sales tax is a "trust" tax: the state's view is that you collected (or should have collected) it from your customers and owe it regardless. Sellers who ignore nexus for years can face assessments that dwarf their actual profit on those sales, because they never charged the customer and now owe it out of pocket. The earlier you get compliant, the smaller the exposure.

The marketplace facilitator wrinkle

There's some good news for marketplace sellers. Most states now have "marketplace facilitator" laws that make the platform, Amazon, Etsy, eBay, Walmart, responsible for collecting and remitting sales tax on your behalf for sales made through that marketplace. If all your sales go through such platforms, much of your collection burden may already be handled. But it's not a free pass: you can still have a registration or reporting obligation, and any sales through your own website (a Shopify store, say) fall back on you. The checker assumes direct responsibility because that's where sellers get caught out.

Resale certificates: the other side of sales tax

Nexus is about tax you must collect. The flip side is tax you shouldn't pay. When you buy inventory to resell, you generally shouldn't pay sales tax on that purchase, you collect it later from your end customer instead. A resale certificate is what lets you buy tax-free from suppliers. Sellers who don't have the right certificates in the states they operate in quietly overpay sales tax on every restock, money that's hard to claw back. Getting your nexus registrations and resale certificates set up together is the efficient way to handle both sides at once.

What to do once you have nexus

If the checker flags nexus, the path is straightforward but state-specific:

• Register for a sales-tax permit in each state where you have nexus, before you start collecting (collecting without a permit is itself a problem in many states).
• Collect the correct rate, which can vary by city and county, not just state, on taxable sales to customers in that state.
• File and remit on each state's schedule, monthly, quarterly or annually depending on volume, even in periods where you owe nothing.
• Track thresholds in states where you're close, so you register the moment you cross rather than after.

For a foreign-owned business selling into the US, this is on top of federal obligations like Form 5472 and entity filings, sales tax is a separate, state-level layer that catches many international sellers off guard.

Common nexus mistakes

The errors we see most: assuming "I'm based in one state, so I only owe there", which ignores both inventory and economic nexus. Assuming a marketplace handles everything, when website sales don't. Ignoring nexus until a state sends a notice, by which point the back-tax bill is large. And the reverse mistake, registering in states you don't actually have nexus in, creating filing obligations and busywork you didn't need. The goal is to register where you must and nowhere you don't.

Get it right before it compounds

Sales-tax nexus compounds quietly: every month you sell into a state where you have an obligation but aren't registered adds to the liability. The checker gives you a fast read, but the exact thresholds, rates and registration steps differ in every state and change regularly. Our team runs a full nexus review, registers you where you actually owe, secures your resale certificates, and can fold ongoing compliance into your monthly bookkeeping so you collect and remit correctly without thinking about it.

How to clean up past nexus exposure

If you discover you've had nexus in states where you never registered, don't panic, but don't sit on it either. Most states offer a voluntary disclosure agreement (VDA): you come forward, register, and pay back tax for a limited look-back period (often three to four years) in exchange for waived or reduced penalties. That's almost always cheaper than waiting for the state to find you, which can mean unlimited look-back plus full penalties. The key is acting before the state contacts you; once they do, the favorable VDA terms usually disappear.

Cleaning up also means deciding where you genuinely have to register versus where you've simply made a few sales. Registering everywhere "to be safe" creates a pile of ongoing filings you don't need. A proper nexus study maps your real exposure, home state, inventory locations, and the specific states where you've crossed economic thresholds, so you fix what's broken without manufacturing new obligations.