US sales tax for online sellers: economic nexus explained

By the Zipple team · Updated October 28, 2026

The US has no national sales tax. Each state with a sales tax decides when an out-of-state seller has to register and collect it. Since 2018 that can happen without any office or staff in the state.

What changed in 2018

In South Dakota v. Wayfair (June 2018), the US Supreme Court allowed states to require remote sellers to collect sales tax based on sales volume alone. This is called economic nexus. Every state with a sales tax now has an economic nexus rule.

The usual threshold

Many states use $100,000 in sales to customers in that state in the current or previous calendar year. Some use $250,000 or $500,000. Some count all sales, others only taxable sales.

Many states also used to count 200 separate transactions, which caught small sellers with many cheap orders. A growing number of states have dropped that test, including Illinois from January 1, 2026, so in those states only the dollar amount matters. Others still use it.

Does it apply to you?

• Physical goods shipped to US customers: yes, this is what sales tax is mainly about.
• Software and SaaS: taxable in some states and not in others.
• Services: mostly not taxed, but some states tax specific services.
• Marketplaces: Amazon, Etsy and similar platforms collect and remit sales tax for sales made through them in almost every state. Those sales may still count toward your threshold in some states.

Once you cross a threshold

1. Register for a sales tax permit with that state before you start collecting.
2. Charge sales tax at checkout to customers in that state.
3. File returns monthly, quarterly or yearly, as the state assigns, even when you owe nothing.

This guide is general information, not advice for your situation.