Sales tax nexus evaluation

Research summary and findings for 'Sales tax nexus evaluation' (US businesses — LLC founders, business owners) Steps taken: - Performed parallel web searches targeting authoritative sources (state Departments of Revenue via aggregators, Streamlined Sales Tax resources, Supreme Court Wayfair opinion, and leading tax guidance from Avalara, Sales Tax Institute, Wolters Kluwer). - Scraped and compressed the most relevant guidance and state-level summaries to extract: state economic nexus thresholds, marketplace facilitator rules, physical-presence triggers (including third-party fulfillment), click-through/affiliate nexus rules, sourcing approaches, registration and filing timelines, penalties and mitigation options, and recent trends through Jan

Research summary and findings for 'Sales tax nexus evaluation' (US businesses — LLC founders, business owners) Steps taken:

• Performed parallel web searches targeting authoritative sources (state Departments of Revenue via aggregators, Streamlined Sales Tax resources, Supreme Court Wayfair opinion, and leading tax guidance from Avalara, Sales Tax Institute, Wolters Kluwer).
• Scraped and compressed the most relevant guidance and state-level summaries to extract: state economic nexus thresholds, marketplace facilitator rules, physical-presence triggers (including third-party fulfillment), click-through/affiliate nexus rules, sourcing approaches, registration and filing timelines, penalties and mitigation options, and recent trends through Jan

Key findings (compressed)

Nexus types and the legal pivot - Two dominant nexus concepts

physical presence (traditional) and economic nexus (post-South Dakota v. Wayfair, 2018). Economic nexus relies on in-state economic activity such as dollars of sales and/or number of transactions. 2) State-by-state economic nexus thresholds (high-level summary) - Most states use a $100,000 annual sales threshold or $100,000 OR 200 transactions; many states have standardized to $100,000-only thresholds in recent years. Examples from authoritative summaries: $100,000 or 200 transactions is common; Texas set a $500,000 threshold; Mississippi historically used $250,000. (State-specific details and effective dates were collected from Sales Tax Institute and Avalara state summaries.)

Marketplace facilitator laws - Nearly every state with sales tax now has marketplace facilitator rules requiring large marketplaces to collect and remit sales tax for third-party sellers in many cases. Marketplace sales may be included or excluded from seller-level thresholds depending on the state—this is state-specific.

Physical-presence and other nexus triggers - Physical presence still creates nexus

offices, stores, employees, property, owned/leased equipment, sales reps, and inventory stored in-state (including third-party warehouses such as Amazon FBA). Affiliate and click-through relationships may also create nexus in certain states.

Sourcing rules (origin vs. destination) - States vary in sourcing rules; most states tax retail sales based on destination-sourcing for goods (i.e., where shipped/used), but sellers must confirm each state's sourcing rules for sales tax and local rate application. 6) Registration, collection, filing, and compliance steps (practical checklist) - Monitor rolling 12-month and calendar-year sales and transaction volumes by state. - When threshold met, register with state DOI/DOF within the state’s required timeframe (varies; examples

register within 30 days or begin collection the next transaction or within 20–60 days). - Collect appropriate state and local tax rates, file returns and remit periodically (monthly/quarterly/annual depending on volume). - Consider marketplace facilitator status, exemptions, sourcing, and whether exempt sales count toward thresholds. - Maintain documentation of evaluation and registration decisions; use third-party tax engines or automated nexus-risk tools where practical.

Penalties, interest, and mitigation - Penalties and interest apply for late registration/collection; several states offer limited relief via voluntary disclosure agreements (VDAs) or registration relief windows for newly-affected remote sellers. Relief rules and lookback periods differ by state.

Recent trends through Jan 2026 - States are continuing to adjust rules post-Wayfair

many have removed transaction-count tests, standardized on $100,000 sales thresholds, broadened what sales count toward thresholds (e.g., digital goods, SaaS, taxable services), and strengthened marketplace facilitator reporting and collection. Enforcement and audit activity on remote seller obligations has increased. Actionable guidance for US business owners/LLC founders (practical next steps) - Run a state-by-state nexus risk assessment for the prior 12 months (sales dollars and transaction counts), including marketplace and exempt sales treatment. - Identify states where you hold inventory (including third-party warehouses) or have employees/agents — these generally create immediate physical nexus. - If thresholds are exceeded, promptly register and begin collection per that state’s timeline; document the date threshold was exceeded and the basis for registration. - Use automated tax rate and filing tools or engage a tax advisor for registration and VDA options if historic liability is a concern. - Keep ongoing monitoring (monthly or quarterly) to capture changes in thresholds, sourcing rules, and marketplace laws. Sources used (selected authoritative references and pages scraped): Sales Tax Institute (state-by-state chart, updated 1/1/2026), Avalara state-by-state economic nexus guide, Wolters Kluwer economic nexus guide, Streamlined Sales Tax resources, and the Supreme Court Wayfair decision (legal basis). Full excerpts and citations below. Conclusion: I collected and compressed authoritative, current (through Jan 2026) state-level guidance and practical compliance steps to support writing a comprehensive blog and newsletter on 'Sales tax nexus evaluation' for US business owners and LLC founders. Based on this research I can now draft detailed blog content that: explains nexus types; provides a practical evaluation checklist; includes state-specific notes and examples (highlighting common thresholds and notable exceptions such as Texas and Mississippi); addresses marketplace facilitator implications; and gives compliance steps, timing, and mitigation options.