Rules Resource
Sales Tax Nexus
Direct Answer
Sales tax nexus is the connection between a seller and a state that can create a collection obligation. Nexus can come from physical presence, inventory, employees, affiliates, marketplace activity, or economic thresholds based on sales revenue or transactions.
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Calculate Sales Tax
Beverly Hills, California combined rate
9.5%
Example ZIP-level estimate for Beverly Hills, California.
- State tax
- $7.25
- Local tax
- $2.25
- Total tax
- $9.50
- Final amount
- $109.50
Physical Nexus
Physical nexus can come from offices, stores, employees, warehouses, inventory, service visits, trade shows, or other in-state activities. It is often easier to identify than economic nexus because it ties the seller to a physical footprint.
Economic Nexus
Economic nexus is triggered by remote selling activity into a state. Thresholds vary by state and can be based on sales revenue, transaction count, or both. Once a threshold is met, the seller may need to register, collect, and remit tax.
- Track sales by destination state.
- Separate marketplace sales from direct website sales.
- Review thresholds before a seasonal or promotional spike.
FAQ
Sales Tax Questions
Does nexus mean every order is taxable?+
No. Nexus creates a collection obligation, but product taxability and exemptions still determine whether a specific order is taxed.
Do marketplaces remove nexus obligations?+
Not entirely. Marketplaces may collect on marketplace orders, while direct sales and reporting obligations may still need review.
What is physical nexus?+
Physical nexus can come from offices, employees, inventory, warehouses, trade shows, service visits, or other in-state business activity.
What is economic nexus?+
Economic nexus is created by remote sales activity into a state, usually after a seller crosses a revenue or transaction threshold.
Do small sellers need to track nexus?+
Yes. Even if a seller is below thresholds today, growth, seasonal spikes, marketplace sales, or direct website sales can change obligations.
Does nexus mean I must collect tax on exempt items?+
No. Nexus can create a collection obligation, but product taxability and exemption rules still determine whether a specific transaction is taxable.
Related Tools
Use these pages to verify rate logic, ZIP accuracy, ecommerce obligations, and state-level data before relying on an estimate.