You’re a Florida business owner with a product people want—maybe you’ve started shipping orders across state lines, or you’re thinking about expanding there. Then a sales tax question hits: do you owe sales tax in those other states? The answer hinges on one concept: nexus. Nexus is the legal connection between your business and a state, and it determines whether you must register, collect, and file sales tax there. Getting this wrong can leave you exposed to back taxes and penalties, or cause you to collect tax you didn’t actually owe. Understanding when nexus applies protects your compliance and simplifies your filing.
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What is sales tax nexus?
Sales tax nexus is the legal link that creates an obligation for your business to collect and remit sales tax in a state. You have nexus in a state if you have a meaningful presence there—physical or economic. The Florida Department of Revenue and other states use nexus rules to determine who must register and file sales tax. If you have nexus in another state, you’re expected to register with that state’s tax authority, collect sales tax from customers, and file periodic returns. If you don’t have nexus, you typically do not have to register or file in that state. Nexus rules have changed significantly since the 2018 Supreme Court ruling (South Dakota v. Wayfair), which expanded when online sellers owe tax.
Does this apply to your business in Florida?
Yes, if you sell tangible goods or taxable services and have customers outside Florida. Under Florida Department of Revenue rules, services are generally not taxable unless specifically listed in statute; tangible personal property is taxable unless exempt. If you’re selling physical products or listed services and ship them out of state or have a presence in another state, nexus rules apply. You need to know where you have nexus to avoid compliance gaps.
The two types of nexus: physical and economic
Physical nexus happens when you have a tangible presence in a state. That includes a warehouse, office, employees, a store, or even a pop-up location. If you have a warehouse in Texas, you have physical nexus there. Physical nexus is straightforward and has been law for decades.
Economic nexus is newer and broader. Since 2018, most states have adopted economic nexus thresholds. You have economic nexus in a state if you meet a sales or transaction threshold—often $100,000 in annual sales or 200+ transactions in a 12-month period. The exact threshold varies by state. Economic nexus applies even if you have no physical presence in the state. If you’re an online seller with customers in multiple states, you likely have economic nexus in many of them.
How to determine if you have nexus in another state
Step 1: Map your physical presence. Do you have an office, warehouse, employees, inventory, or any property in another state? If yes, you have physical nexus there.
Step 2: Check your sales volume in each state. Track your annual sales revenue and transaction count by state. If you hit the economic nexus threshold in any state, you have nexus there.
Step 3: Identify the threshold for each state. Look up the economic nexus rule for each state where you sell. Most states use $100,000 annual sales or 200 transactions, but some differ. State tax websites usually publish these thresholds clearly.
Step 4: Register before you’re required. Once you know you have nexus, register with that state’s tax authority before the deadline. Registering early keeps you compliant and on the right side of the rules.
What happens when you have nexus
Once you establish nexus in a state, you must register for a sales tax permit in that state. You then collect sales tax on taxable sales to customers in that state at the rate in effect at the time of sale. Most states require you to file a sales tax return monthly, quarterly, or annually—check the specific state’s schedule. You remit the tax you collected to the state.
The tax rate varies by state and, within some states, by county or locality. This is where multi-state selling gets complex. You need to know the rate for each state and jurisdiction where you have nexus, and you must apply the correct rate to each transaction.
For Florida-specific guidance on rate structure and filing, see our complete Florida sales tax guide, which walks through the 6% state rate and county surtaxes. If you’re expanding out of state, you’ll need to research each state’s own rate and rules.
Common mistakes that trigger compliance problems
Ignoring economic nexus thresholds. Many sellers think nexus only applies if they have a physical presence. They hit $100,000 in sales to a state and don’t realize they’re now required to register and collect tax. Not registering when you meet the threshold can trigger back-tax bills and penalties. The fix: track your sales by state monthly and set a reminder to register when you hit the threshold.
Applying the wrong tax rate. Multi-state sellers often charge the same tax rate to all customers, or they forget to update a rate when a state raises it. Tax rates change, and accuracy matters. Collecting too little leaves you short when you file; collecting too much means you’re keeping money that belongs to the state. The fix: use each state’s tax rate calculator or lookup tool to verify the current rate before you process each order, or invest in automated tax calculation for your platform.
Not distinguishing taxable from non-taxable products. Not all items are taxable in all states. Some states exempt groceries, clothing, or specific services. If you’re selling across state lines, you need to know what’s taxable in each state. Charging tax on exempt items means your customers overpay, and you’re liable for the difference. The fix: document your product types and confirm taxability in each state where you sell, especially if you sell services.
Registering late or not at all. Some owners register only after they receive a notice from a state. By then, you may owe back taxes and face interest or penalties. The fix: register as soon as you know you have nexus, not after a state contacts you.
How outsourcing helps with multi-state sales tax
Managing sales tax across multiple states is time-consuming. You need to track sales by state, know each state’s rules, apply the right rates, and file on time in each jurisdiction. Outsourcing Processing helps you organize and categorize your transaction data and calculate sales tax liability automatically. Instead of juggling rates and deadlines yourself, you get clear, ready-to-review reports that show what you owe and where. That frees you to focus on growing your business while staying compliant.
Frequently Asked Questions
What’s the difference between nexus and registering for sales tax?
Nexus is the legal connection that creates an obligation. Registration is the action you take in response. Once you have nexus, you must register—if you don’t register when you’re required to, you’re non-compliant. Nexus is the trigger; registration is the consequence.
Do I have to charge sales tax if I’m shipping from Florida to another state?
It depends on whether you have nexus in that state. If you ship a product from Florida to a customer in another state and you have no nexus there, you typically don’t collect tax. But if you meet that state’s economic nexus threshold (usually $100,000 in sales), you do. Check the destination state’s nexus rules.
What if I only make a few sales outside Florida—do I still need to register?
No, unless you meet the state’s economic nexus threshold. If you’ve only made a handful of sales, you’re below the threshold and don’t have to register. Once you cross it, that’s when you register. Track your sales volume carefully.
How do I find a state’s nexus threshold?
Visit the state’s department of revenue or tax authority website. Most states publish their economic nexus rules clearly. Look for terms like “sales tax nexus,” “economic threshold,” or “remote seller.” If you’re unsure, contact the state directly or consult a tax professional familiar with that state.
Do I have to file sales tax returns in every state where I have nexus?
Yes. Once you register in a state, you must file on that state’s schedule—usually monthly, quarterly, or annually. Each state sets its own deadline. If you have nexus in five states, you’ll have five filing obligations on different schedules. Track your deadlines carefully to avoid late filings.
Disclaimer: This article is for general educational purposes and isn’t a substitute for advice from a licensed CPA or tax attorney. Rules vary by jurisdiction and change over time — always confirm current requirements with the Florida Department of Revenue or your advisor.
Take action on nexus today
Nexus rules affect your compliance and cash flow, especially if you’re selling across state lines. Start by mapping your physical presence and tracking your sales by state. If you’re approaching or have exceeded an economic nexus threshold, register promptly with that state. The earlier you get ahead of the rules, the cleaner your compliance record. Multi-state selling doesn’t have to be chaotic—clear rules and organized data make it manageable.
For the Florida-specific rules behind this, our Florida sales tax guide breaks down rates, deadlines, and filing steps county by county.