If you sell into the U.S. from abroad, “nexus” is the single tax rule you need to understand. Get it wrong and you can owe months (or years) of back tax, plus penalties. Get it right and you keep the money you earned.
This guide gives you the real 2025 picture — which states still use the $100,000 or 200-transaction test, which states have dropped the transaction count, and what practical steps you must take this month.
Quick summary — what changed in 2025
- Most states still use a $100,000 sales threshold (in a look-back period) as the main trigger for economic nexus.
- A growing number of states removed the 200-transaction test, leaving only the dollar threshold. This matters if you do a lot of low-value sales.
- Marketplace platforms now handle tax collection for their sellers in most states — but that doesn’t always remove your registration or reporting obligations for direct sales from your site.
Why the $100k rule matters (and why the transaction test used to be a loophole)
States use economic nexus to say: if you sell enough into our state, you must collect and remit sales tax — even if you have no physical presence there.
For most states, the math is simple: if your gross sales into the state in the current or previous 12 months exceed $100,000, you have nexus. Historically, many states added a second test — 200 transactions — which caught high-volume, low-value sellers. In 2025, several states removed that transactions clause. That means if you sell lots of low-cost items, you’re less likely to trigger nexus by count alone in those states — but only if your total dollars remain under the threshold.
Who still uses $100k + 200 transactions? (and who removed the transaction count)
The landscape is changing fast. A few headline points for 2025:
- Most states kept $100k as the dollar threshold — this is the baseline you should watch for in most states.
- Some states have higher thresholds for specific remote-seller categories — check state rules for exceptions.
- Several states removed the 200-transaction test in 2025, so sellers doing many small orders are less likely to trigger nexus by count alone.
Because the list changes (states keep tweaking), treat this as a map, not a rulebook. Check state guidance if you’re anywhere near $80k–$120k in sales to a state.
Marketplace facilitator rules — why platforms aren’t a full shield
Good news: most marketplaces now collect and remit sales tax for their sellers. That removes the headache for sales made through the platform. But:
- If you sell on your own website, through B2B invoices, at pop-ups, or via direct orders, that money may not be covered.
- Some states still require sellers to register even when marketplaces collect. Being listed as a seller is not the same as being exempt.
Practical takeaway: treat marketplace remittance as partial protection. Reconcile marketplace reports monthly against your own site sales.
What this means for low-price, high-volume sellers
If you sell inexpensive items in bulk (think $5–$10 goods), the 200-transaction rule used to be the main risk. With many states removing that test in 2025, your risk now comes from aggregate dollars. That’s often good for you if your orders are small, but only if your total state-by-state sales stay under $100k.
If you do 10,000 orders at $8 each into a state, and that state removed the transaction test, you won’t hit nexus by count — but you very well might by dollars ($80k in that example). So keep an eye on both.
Practical steps — what you must do this week
- Export sales by ship-to state for the past 12 months. Include everything: marketplace sales, direct site sales, any offline orders you shipped into the U.S.
- Build a simple state chart. For each state, list: dollar threshold, transaction threshold (if still in place), and whether marketplace sales count toward nexus. Update it quarterly.
- Reconcile marketplace tax reports monthly. Get CSVs from Amazon, Etsy, Shopify, etc., and cross-check tax collected vs gross marketplace sales.
- If a state total is close to its threshold (say within 85–95%), register now. Registration and setup often take time — don’t wait until you cross the line.
- Automate rate calculation and filing. Use a tax engine for rate lookups and returns — but keep your own records monthly to avoid surprises.
If you already crossed a threshold, don’t panic, act
Most states offer voluntary disclosure programs. It means coming forward, registering properly, and paying what you owe — often without stiff penalties if you act early. It’s not the end of the world, but waiting makes it worse.
Examples sellers often face
- Selling through Amazon and your brand store. Amazon collects tax from marketplace orders, but your direct-store sales may trigger nexus.
- Using third-party warehousing (FBA or other). That inventory in a state creates a physical nexus — separate from an economic nexus. Track where your inventory sits.
- Selling a mix of digital and physical goods. Some states treat digital differently — check whether your goods count toward nexus or are taxed differently in each state.
Tools & workflow that actually work
- Weekly or bi-weekly: update sales totals by state.
- Monthly: reconcile marketplace tax with your bookkeeping.
- Quarterly: review state rule changes (many in 2025 are still changing).
- Use a tax engine for rate and filing automation, but keep a manual check every month.
A few edge notes you can’t forget
- Look-back windows vary. Some states measure the prior 12 months, others use current and next year estimates.
- Nexus triggers other rules. Once you have nexus, you might need to register for a sales tax permit, hold exemption certificates, and file returns.
- States are sharing more data. Many use automated matching from marketplaces, payment processors and banks — oversight is increasing in 2025.
Quick checklist before your next big push or sale
- Export the last 12 months order data, including a state-by-state breakdown.
- Identify states where you’re near or over $100k.
- Check for inventory/fulfillment presence in U.S. states (this can trigger physical nexus).
- Confirm marketplace vs direct sales numbers.
- Set your next review for 90 days from now (nexus rules change fast).
Final Advice
If you’re selling into the U.S., don’t wing nexus. Track your states. Use automation, but don’t rely on it exclusively. When in doubt, register or talk to a U.S. sales tax specialist — the cost of doing it right is always cheaper than the cost of fixing it later.
