Forty-five states and Washington D.C. all have a sales tax. But every state is different – the exact laws that create sales tax nexus in one state may be a little different in another. This post lists all the states and a link to sales tax laws with the exact wording they use regarding what business activities create sales tax nexus.
Remember, if you have sales tax nexus in a state, you need to:
- Register for a sales tax permit in that state
- Charge sales tax to customers in that state regardless of how you sold them a product or from where that product shipped
- File sales tax returns in that state
Also note that it’s almost impossible to avoid home state nexus (meaning if you live or work in a state then you’ll probably have nexus there), so this list focuses on what constitutes nexus for out-of-state sellers. Keep in mind that in many cases what we think of as “sales tax” when we pay it as referred to as “use tax” when collected and remitted by an out-of-state seller.
If you’re wondering if you have sales tax nexus in a state, find it below to read what that state’s laws and/or main taxing authority has to say about sales tax nexus.
What Conditions Create Sales Tax Nexus in Every State
Note: Most definitions of nexus include the terms “doing business” or “engaged in business.”
California – Section 6203 of the California Revenue and Tax Code talks about what creates sales tax nexus in California.
Connecticut – General Statutes of Connecticut, Title 12 Taxation, Chapter 219, section 12-407(a)(15)(A) details what constitutes sales tax nexus. (You can find it easily in this long page of text by searching the exact term “Engaged in business in the state”.
Hawaii – Hawaii doesn’t have sales tax, but does have a “general excise tax.” Most states with any kind of presence in Hawaii, including providing services, will likely be subject to the general excise tax. Hawaii defines doing business in their General Excise Tax law, chapter 237-2 (Starts on p. 4 of this link).
Illinois – Illinois considers “retailers” in the state to have sales tax nexus. Here’s how Illinois defines “retailers,” (Page 2) and here (search “Retailer maintaining a place of business in this State”).
Indiana – Indiana considers “retailers” to have nexus in Indiana. Here’s how Indiana defines retailers with nexus: Indiana Code 6-2.5-3-1(c) (you may have to choose “Chapter 6: Taxation” then use the search bar within the code).
Nevada – Nevada defines what creates sales tax nexus in the state in a Sales Tax FAQ. Interestingly, Nevada repealed their definition of “retailer maintaining a place of business” in the state in 2007 and have not replaced it. They have, however, provided guidance for out-of-state sellers in the Use Tax – Common Questions and Answers (opens in word doc!) document on their Department of Taxation Website.
New Jersey – New Jersey Statute 52:32B-2 defines what is considered a “seller” under New Jersey law, and New Jersey Technical Bulletin 78-R goes into more detail about what activities create sales tax nexus in New Jersey (p. 2).
New Mexico – New Mexico has a “gross receipts tax” rather than a sales tax. You can most easily find out more about who has to collect and remit gross receipts tax here.
Oklahoma – You can click here to read exactly what the Oklahoma Department of Revenue (Oklahoma’s taxing authority) has to say about what constitutes sales tax nexus in Oklahoma (page 8 – “Place of Business.”)
Pennsylvania – Pennsylvania considers sellers “having or maintaining a place of business” in the state to have nexus. Here’s what Pennsylvania code has to say about what defines “having or maintaining a place of business.”
South Carolina – South Carolina spells out who has sales tax nexus in the state on this page under “Who is required to file a sales and use tax return?”
Washington D.C. – Sellers “engaging in business in the District” have sales tax nexus in the District of Columbia. Find out what they mean by “engaging in business in the District” by searching for those terms here.
West Virginia – This page defines what conditions create sales tax business in West Virginia for “retailers.”
See any broken links? Have questions? Start the conversation in the comments!