The Decline of Economic Nexus Transaction Thresholds
As of January 1, 2025, Alaska officially removed its 200-transaction threshold for economic nexus, joining a growing list of states making similar moves. This brings the total number of states that have eliminated their transaction threshold to 14—and the trend is far from over.
New Jersey is the latest state to consider such a change, with a recently introduced bill aiming to eliminate its transaction threshold. If passed, this legislation would further align New Jersey’s sales tax requirements with states that have opted to rely solely on sales revenue to determine economic nexus.
The push to remove transaction thresholds reflects a broader effort to simplify compliance for businesses engaged in interstate sales. For many companies, tracking transaction counts across multiple states adds unnecessary complexity. By focusing exclusively on sales revenue, states can streamline tax collection while ensuring they capture revenue from businesses with significant market presence.
While this shift reduces compliance burdens in some respects, it also underscores the importance of monitoring evolving sales tax laws. Businesses should stay proactive in understanding where they have economic nexus and adjust their tax collection processes accordingly.
With New Jersey considering this change, more states will likely follow suit. The evolving landscape of economic nexus laws highlights the need for businesses to stay informed and adapt to new tax compliance requirements.
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