Key Takeaways:
- More states are moving away from the 200 transaction economic-nexus test.
- Revenue for nexus is now the number many remote sellers need to watch most closely.
- A revenue-only threshold does not eliminate the need for state-by-state review.
- Registration, filing, and taxability questions can remain after nexus is established.
States are eliminating the 200-transaction nexus threshold – this marks one of the biggest structural shifts since Wayfair.
States like Illinois and Utah have removed the 200-transaction test and now rely solely on $100,000 in sales revenue to determine economic nexus. Many states are following suit with new sales tax laws, such as Alaska, which is moving toward revenue-only thresholds as well.
What This Means:
✔ Simplified sales tax compliance for remote sellers
✔ Reduced transaction tracking burden
✔ Revenue thresholds still trigger nexus rules once exceeded
If you’re selling across state lines, revenue, not transaction count, is now the key metric to monitor. Let’s dive into what that could mean for you:
The Spreadsheet May Be Smaller, but the Risk Is Still There
For years, a lot of businesses had to keep two separate figures in view for each state: dollars of sales and the number of transactions. New sales tax laws that remove transaction counts can make tracking less cumbersome. They do not make compliance automatic.
The relevant revenue number for nexus does not always match the one on a sales dashboard. Somebody still has to sort out which receipts count, whether returns change the math, how marketplace activity is handled, and the day the threshold was crossed. Without clear ownership, a business can sail past nexus dates without realizing.
What to Know
You Need a Calendar. Not Just a Total.
With revenue threshold nexus rules, the date matters as much as the total. Crossing a threshold in December can create a very different tax registration and filing conversation than crossing it in February. New sales tax laws may also change which measurement period a state uses. One state may look at the current calendar year, another at the prior year, and another at a different window altogether. A year-to-date total by itself leaves too much out.
A sensible review usually starts with:
- Sales by destination state and the reporting period used for each state.
- The date each relevant revenue threshold was crossed.
- Marketplace, exempt, wholesale, and returned transactions that may be treated differently.
- Existing registrations, filings, and any periods that may already need attention.
Nexus Is Not One-Size-Fits-All
These new sales tax laws that move toward revenue thresholds for nexus are a broad trend, not a national rewrite of every state’s sales tax rules. States still make their own rules, and those rules can change. A business may have economic nexus in one state, physical presence in another, and no obligation at all in a third.
Then there is taxability. Nexus rules may mean a business needs to register and collect, but it does not automatically settle whether each product, service, fee, or bundled sale is taxable. Add filing cadence, local rates, exemption certificates, and marketplace facilitator rules, and these seemingly simple new sales tax laws can get complex fast.
Don’t Let Software Be The Only Set of Eyes
Software is useful for calculations and returns. But it cannot reliably tell you that the source data is incomplete, interpret an unfamiliar state rule for your facts, or decide how to approach past exposure. Those calls need judgment—and often a real conversation with someone who knows sales tax audits and multi-state remediation.
Maybe your business moved into new states, changed its sales channels, or stopped watching transaction counts because they seemed obsolete. One reason to look at the process again is that these new sales tax laws can upend things. Keep the data, test the assumptions, and ask for help with nexus analysis before a state starts asking its own questions.
Talk With a Sales Tax Expert
Economic nexus rules are evolving. Revenue thresholds for nexus are shifting. Enforcement is increasing. If you have questions about nexus, multi-state exposure, or other sales tax compliance matters, our team is here to help.
Don’t wait until a notice arrives.
About Davis Davis & Harmon LLC: Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts specializes in sales/use tax refund recovery, navigating new sales tax laws, and audit defense. Our team of consultants is composed of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis Davis & Harmon, LLC, we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.