Understanding Economic Nexus After Wayfair

The South Dakota v. Wayfair, Inc. Supreme Court decision in 2018 fundamentally changed how states can require businesses to collect sales tax. Prior to Wayfair, physical presence was required to establish nexus. Now, economic activity alone can trigger sales tax obligations.

Most states have adopted economic nexus thresholds of $100,000 in sales or 200 transactions. However, some states have different thresholds, and understanding your obligations is critical.