top of page

Understanding State Economic Nexus Threshold Laws: A Guide for Shopify Sellers

Writer's picture: Jacob CurtisJacob Curtis

Economic nexus thresholds are crucial for Shopify sellers to understand, as they determine whether you need to collect and remit sales tax in a particular state. Each state has its own economic nexus laws, which are typically based on your sales revenue, the number of transactions, or both. Here, we’ll break down the economic nexus thresholds by state to help you stay compliant and avoid unexpected tax liabilities.


What Is Economic Nexus?

Economic nexus refers to the requirement for remote sellers—like Shopify sellers—to collect and remit sales tax in a state if they meet certain economic activity thresholds. These thresholds are usually defined by the total revenue generated from sales into the state or the number of transactions with customers in that state.


State-by-State Economic Nexus Thresholds

Below is an overview of the economic nexus thresholds for each state. Keep in mind that laws can change, so it’s important to regularly check the requirements for the states where you do business.


Alabama

  • Threshold: $250,000 in gross sales

  • Measurement Period: Current or previous calendar year

Alaska (No State Sales Tax)

  • Threshold: $100,000 in gross sales

  • Note: Effective January 1, 2025, Alaska removed the 200 transactions threshold, focusing solely on the sales threshold.

Arizona

  • Threshold: $100,000 in gross sales

  • Measurement Period: Current or previous calendar year

Arkansas

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

California

  • Threshold: $500,000 in gross sales

  • Measurement Period: Previous or current calendar year

Colorado

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous calendar year

Connecticut

  • Threshold: $100,000 in gross sales and 200 transactions

  • Measurement Period: 12-month period ending September 30

  • Note: Both criteria must be met to establish economic nexus.

Delaware (No State Sales Tax)

  • Note: Delaware does not impose state sales tax, but other tax obligations may apply.

Florida

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous calendar year

Georgia

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Hawaii

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Current or previous calendar year

Idaho

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous or current calendar year

Illinois

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current 12-month period

Indiana

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous calendar year

Iowa

  • Threshold: $100,000 in gross sales

  • Measurement Period: Current or previous calendar year

Kansas

  • Threshold: $100,000 in gross sales

  • Measurement Period: Current or previous calendar year

Kentucky

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Current or previous calendar year

Louisiana

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Maine

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Current or previous calendar year

Maryland

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous calendar year

Massachusetts

  • Threshold: $100,000 in gross sales

  • Measurement Period: Current or previous calendar year

Michigan

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Current or previous calendar year

Minnesota

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Mississippi

  • Threshold: $250,000 in gross sales

  • Measurement Period: Previous or current calendar year

Missouri

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous 12-month period

Montana (No State Sales Tax)

  • Note: Montana does not impose state sales tax, but other tax obligations may apply.

Nebraska

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Nevada

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

New Hampshire (No State Sales Tax)

  • Note: New Hampshire does not impose state sales tax, but other tax obligations may apply.

New Jersey

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Current or previous calendar year

New Mexico

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous calendar year

New York

  • Threshold: $500,000 in gross sales and 100 transactions

  • Measurement Period: Previous or current calendar year

North Carolina

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

North Dakota

  • Threshold: $100,000 in gross sales

  • Measurement Period: Current or previous calendar year

Ohio

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous or current calendar year

Oklahoma

  • Threshold: $100,000 in gross sales

  • Measurement Period: Current or previous calendar year

Oregon (No State Sales Tax)

  • Note: Oregon does not impose state sales tax, but other tax obligations may apply.

Pennsylvania

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous calendar year

Rhode Island

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

South Carolina

  • Threshold: $100,000 in gross sales

  • Measurement Period: Current or previous calendar year

South Dakota

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Tennessee

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous or current calendar year

Texas

  • Threshold: $500,000 in gross sales

  • Measurement Period: Previous 12-month period

Utah

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Current or previous calendar year

Vermont

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Virginia

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Washington

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous or current calendar year

West Virginia

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Previous or current calendar year

Wisconsin

  • Threshold: $100,000 in gross sales or 200 transactions

  • Measurement Period: Current or previous calendar year

Wyoming

  • Threshold: $100,000 in gross sales

  • Measurement Period: Previous or current calendar year

  • Note: Effective July 1, 2024, Wyoming eliminated the 200 transactions threshold, focusing solely on the sales threshold.


Stay Compliant with Economic Nexus Laws

As a Shopify seller, understanding economic nexus thresholds is essential for maintaining compliance and avoiding penalties. Regularly review your sales data and state requirements to ensure you’re meeting your obligations.

If you have any questions or need personalized help, don’t hesitate to reach out. Schedule a call with Jacob by going to https://www.jacobcurtiscpa.com/7-shopify-mistakes-calendar. We're here to help you piece together financial freedom.


コメント


bottom of page