If you sell online or ship products across state lines, you’re probably asking whether you owe sales tax in states where you don’t have a physical location. The answer hinges on economic nexus thresholds—the sales volume at which you’re required to register and collect sales tax in another state. These thresholds changed the rules for millions of small sellers, and they’re about to matter even more in 2026 if your business is growing. Understanding your obligations across state lines keeps you compliant and protects your business from unexpected audit exposure or back-tax liability.
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Does this apply to your business in Florida?
You’re subject to economic nexus rules if you sell products or services that cross state lines—whether through an e-commerce site, marketplace, subscription model, or direct sales. According to the IRS and confirmed by each state’s tax authority, once your sales into a state exceed that state’s economic nexus threshold in a calendar year, you must register for sales tax in that state and collect it from customers. In Florida, tangible personal property is taxable unless specifically exempt, while services generally are not taxable under Florida statute unless listed as taxable. If you’re selling to customers outside Florida—say, across the Southeast or nationwide—you need to know the thresholds in each state you’re reaching.
What are economic nexus thresholds in 2026?
Economic nexus thresholds are the annual sales revenue benchmarks that trigger sales tax registration and collection duties in a state. Each state sets its own threshold, and they haven’t all changed since 2018. For 2026, the most common thresholds remain: many states use $100,000 in annual sales into that state, while others use $500,000, and a few use different figures entirely. These are cumulative—if you sell $30,000 in January, $40,000 in February, and $35,000 in March to customers in one state, you’ve hit a $105,000 economic nexus threshold and triggered registration. The threshold applies to sales into that state during the calendar year, not to your total national sales.
State-by-state thresholds: how they vary
Every state that has a sales tax sets its own economic nexus threshold. Some common patterns: many states adopted $100,000 thresholds after the Supreme Court’s Wayfair decision in 2018, while others chose $500,000 or even higher figures. A few states have thresholds based on transaction count instead of revenue—for example, 200 transactions per year rather than a dollar amount. The best source for current, state-specific thresholds is each state’s department of revenue website. Because thresholds can change, especially around major legislative sessions, you should verify the threshold for each state where you’re selling at least once per year—don’t assume it stayed the same from 2025 to 2026. Tracking your sales by state makes this process routine.
How do you know when you’ve triggered economic nexus?
You cross an economic nexus threshold when your cumulative sales into a state during the calendar year reach or exceed that state’s published threshold. Most businesses track this by totaling all invoices to customers with a billing or shipping address in that state. If you use an e-commerce platform or accounting software with sales tracking, you can usually filter sales by customer location and state. The key is to monitor your running total throughout the year—don’t wait until December to realize you triggered a threshold in March. Once you cross it, you typically have a short window (often 30 days, but check your state’s rule) to register for a sales tax permit in that state. After registration, you must begin collecting sales tax from customers and filing returns, usually monthly or quarterly depending on the state.
What happens when your sales cross the threshold?
When you trigger economic nexus in a state, you’re legally required to register for that state’s sales tax permit. The registration process is usually straightforward—you fill out an online form on the state’s website, provide business information, and receive a permit or account number. After registration, you’re responsible for collecting sales tax from customers on taxable sales into that state (services may not be taxable in all states; in Florida, this depends on whether the service is listed in statute). You’ll then file returns—often monthly or quarterly—and remit the tax collected. The timeline and process vary by state, so when you register, read the state’s guidance or walk through the filing steps yourself so you know what’s required. Not registering after triggering nexus, or failing to collect and remit tax, can result in back-tax assessments and penalties.
How to track your economic nexus triggers
The simplest way to stay on top of economic nexus is to set up a tracking system early. Use a spreadsheet or accounting system that breaks down sales by state, and review it monthly. List each state’s threshold, note your running total for the year, and flag when you cross a threshold. Many e-commerce platforms and point-of-sale systems can generate state-by-state sales reports—use them. If you work with a CPA or back-office team, make sure they know which states you’re monitoring and ask them to alert you if they spot a threshold crossing. This is where organizing transaction data—categorizing each sale by customer location and taxability—saves time later. When you’re ready to register in a new state, you’ll have the supporting documentation and won’t be scrambling to prove your sales history.
Common mistakes with economic nexus thresholds
Confusing total sales with sales into a single state. Your national revenue might be $200,000, but that doesn’t automatically trigger nexus everywhere. What matters is your sales into each specific state. If that $200,000 is spread across ten states with $20,000 in each, you may not trigger any thresholds—it depends on that state’s published limit. Review your sales by state, not your total revenue, to assess your obligations.
Ignoring thresholds for services. If you offer services—consulting, design, coaching, repair—you might assume they’re never taxable. In many states, services aren’t subject to sales tax, but in others, certain services are. Florida’s rule is that services are generally not taxable unless specifically listed in statute. If you offer both products and services, make sure you know which items are taxable in each state, so you only collect tax on what’s required.
Forgetting to register after crossing a threshold. Knowing you’ve crossed the threshold is only half the battle. You then have to register with that state—often within 30 days—and start collecting and filing. Many businesses cross a threshold, forget about it, and then get a back-tax notice months later. Mark the date you cross a threshold in your calendar, and within a week, begin the registration process on that state’s website.
Not tracking sales throughout the year. Waiting until December to check your state-by-state sales totals means you might have been out of compliance for months. Set a monthly reminder to review your sales by state, check them against known thresholds, and flag any that are close to triggering. That way, you’re not surprised, and you can register proactively rather than reactively.
Frequently Asked Questions
What’s the difference between economic nexus and physical nexus?
Physical nexus means you have a real presence in a state—an office, warehouse, or employee. Economic nexus means your sales volume alone is high enough to trigger sales tax obligations, regardless of physical presence. Before 2018, most states required physical nexus; now, economic nexus is the standard.
Do I owe sales tax in Florida if I live and sell there?
Yes. If you’re based in Florida and sell tangible personal property, you owe Florida sales tax on those sales—no threshold applies at your home state. The economic nexus rule applies to sales you make into other states where you don’t have a physical location.
What if I use a marketplace like Amazon or Etsy—do I still track economic nexus?
Amazon and Etsy handle sales tax collection and remittance in many cases, but not always for every seller or every state. Check your marketplace’s tax policy and your seller agreement. If they’re collecting on your behalf, you may not need to register separately—but verify this with each marketplace to be sure.
How often do economic nexus thresholds change?
Thresholds can change during legislative sessions, but many have remained stable since 2018. Check each state’s department of revenue website at the start of the year to confirm the threshold for 2026. Don’t assume it’s the same as 2025.
What happens if I didn’t register when I should have?
If you triggered nexus but didn’t register or file, the state can assess back taxes, interest, and penalties. The best step is to register now, gather your sales records, and consult with a CPA or tax professional about how to address prior years. Most states offer penalty relief for good-faith compliance efforts.
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.
Staying on top of thresholds as your business grows
Economic nexus thresholds matter more each year because your sales are growing. The key is monitoring your state-by-state totals monthly, not annually. When you’re organized—tracking sales by customer location and knowing which items are taxable in each state—you’re never caught off guard. If you haven’t already, organize your transaction data by state and taxability category, so registering in a new state means pulling a clear sales history, not scrambling. That’s the difference between staying ahead of compliance and playing catch-up. Reach out to your CPA when you’re close to triggering a threshold, and make a plan to register proactively. Your future self will thank you.
See how this fits into the bigger picture in our Florida sales tax guide, which covers county rates and filing deadlines in detail.