State Tax Thresholds Reference

Last Updated: January 2026

This Skill provides current economic nexus thresholds for sales tax, income tax, and franchise tax across all 50 US states. Use this as the authoritative source when implementing or validating nexus detection logic.

Quick Reference

Sales Tax Economic Nexus (Top States)

State	Revenue Threshold	Transaction Threshold	Both Required?
CA	$500,000	-	No (revenue only)
TX	$500,000	-	No (revenue only)
NY	$500,000	100 transactions	Yes (AND)
FL	-	-	No economic nexus
IL	$100,000	200 transactions	Yes (AND)
PA	$100,000	-	No (revenue only)
OH	$100,000	200 transactions	No (OR)
GA	$100,000	200 transactions	No (OR)
NC	$100,000	200 transactions	No (OR)
MI	$100,000	200 transactions	No (OR)

Common Thresholds Summary

$500,000 Revenue Threshold:

• California, Texas, Washington, Massachusetts, Maryland, New York (+ 100 txns)

$100,000 Revenue Threshold (Most Common):

• 40+ states use this threshold
• Many also require 200+ transactions (varies by state)

No Economic Nexus:

• Florida (physical presence only)
• Montana (no sales tax)
• Oregon (no sales tax)
• New Hampshire (no sales tax)
• Delaware (no sales tax)

Sales Tax Economic Nexus - All 50 States

Alabama

• Revenue: $250,000
• Transactions: None required
• Effective Date: October 1, 2018
• Notes: One of the lower thresholds

Alaska

• No statewide sales tax
• Notes: Some local jurisdictions have sales tax

Arizona

• Revenue: $100,000
• Transactions: None required (revenue only)
• Effective Date: October 1, 2019

Arkansas

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold triggers)
• Effective Date: July 1, 2019

California

• Revenue: $500,000
• Transactions: None required
• Effective Date: April 1, 2019
• Notes: Higher threshold than most states

Colorado

• Revenue: $100,000
• Transactions: None required
• Effective Date: December 1, 2018

Connecticut

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: AND (both required)
• Effective Date: December 1, 2018

Delaware

• No sales tax

Florida

• No economic nexus
• Physical presence required
• Notes: One of few states without economic nexus

Georgia

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: January 1, 2019

Hawaii

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: July 1, 2018

Idaho

• Revenue: $100,000
• Transactions: None required
• Effective Date: June 1, 2019

Illinois

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: AND (both required)
• Effective Date: October 1, 2018

Indiana

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: October 1, 2018

Iowa

• Revenue: $100,000
• Transactions: None required
• Effective Date: January 1, 2019

Kansas

• Revenue: $100,000
• Transactions: None required
• Effective Date: October 1, 2019

Kentucky

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: October 1, 2018

Louisiana

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: July 1, 2020

Maine

• Revenue: $100,000
• Transactions: None required
• Effective Date: July 1, 2018

Maryland

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: October 1, 2018
• 2019 Update: Changed to $100,000 from prior threshold

Massachusetts

• Revenue: $100,000
• Transactions: None required
• Effective Date: October 1, 2019
• Notes: Previously had cookie nexus rules

Michigan

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: October 1, 2018

Minnesota

• Revenue: $100,000
• Transactions: 200 transactions (retail sales)
• Combined: OR (either threshold)
• Effective Date: October 1, 2018

Mississippi

• Revenue: $250,000
• Transactions: None required
• Effective Date: September 1, 2018

Missouri

• Revenue: $100,000
• Transactions: None required
• Effective Date: January 1, 2023

Montana

• No sales tax

Nebraska

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: January 1, 2019

Nevada

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: October 1, 2018

New Hampshire

• No sales tax

New Jersey

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: November 1, 2018

New Mexico

• Revenue: $100,000
• Transactions: None required
• Effective Date: July 1, 2019

New York

• Revenue: $500,000
• Transactions: 100 transactions
• Combined: AND (both required)
• Effective Date: June 21, 2018
• Notes: Higher revenue threshold but lower transaction count

North Carolina

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: November 1, 2018

North Dakota

• Revenue: $100,000
• Transactions: None required
• Effective Date: October 1, 2018

Ohio

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: August 1, 2019

Oklahoma

• Revenue: $100,000
• Transactions: None required
• Effective Date: November 1, 2019

Oregon

• No sales tax

Pennsylvania

• Revenue: $100,000
• Transactions: None required
• Effective Date: July 1, 2019

Rhode Island

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: July 1, 2019

South Carolina

• Revenue: $100,000
• Transactions: None required
• Effective Date: November 1, 2018

South Dakota

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: November 1, 2018
• Notes: The Wayfair case originated from this state

Tennessee

• Revenue: $100,000
• Transactions: None required
• Effective Date: October 1, 2019

Texas

• Revenue: $500,000
• Transactions: None required
• Effective Date: October 1, 2019
• Notes: Higher threshold than most states

Utah

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: January 1, 2019

Vermont

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: July 1, 2018

Virginia

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: July 1, 2019

Washington

• Revenue: $100,000
• Transactions: None required
• Effective Date: October 1, 2018

West Virginia

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: January 1, 2019

Wisconsin

• Revenue: $100,000
• Transactions: None required
• Effective Date: October 1, 2018

Wyoming

• Revenue: $100,000
• Transactions: 200 transactions
• Combined: OR (either threshold)
• Effective Date: February 1, 2019

Income Tax Nexus & P.L. 86-272

Public Law 86-272 Overview

Protection Applies When:

• Only activity is solicitation of orders for tangible personal property
• Orders are approved and filled outside the state
• No other business activities in the state

Protection Does NOT Apply To:

• Services (e.g., software as a service)
• Intangible goods
• Selling products AND providing services
• Having employees perform non-solicitation activities
• Maintaining inventory in the state

States with Factor Presence Nexus

California:

• $500,000+ sales (property + payroll + sales)
• $50,000+ property
• $50,000+ payroll
• 25% of total sales

New York:

• No factor presence statute (physical presence required)

Texas:

• See Franchise Tax section

Other States:

• Most states rely on physical presence for income tax
• P.L. 86-272 provides protection for many out-of-state sellers

Franchise Tax Thresholds

Texas Franchise Tax (Margin Tax)

Revenue Threshold: $1,230,000 (2024)

• Below this = no franchise tax due
• Above this = subject to margin tax

Tax Rates:

• Retail/Wholesale: 0.375%
• Other businesses: 0.75%

Calculation Base:

• Total revenue minus either:
  • Cost of goods sold (COGS)
  • Compensation
  • 30% of total revenue (standard deduction)
  • $1 million deduction

Delaware Franchise Tax

Based on authorized shares:

• Minimum: $175
• Maximum: $200,000

Other States

Most states don't have separate franchise taxes. Check state-specific rules for:

• Annual report fees
• Minimum taxes
• Entity-level taxes

Alert Severity Guidelines

Use these guidelines when generating alerts:

RED (Critical) - Immediate Action Required

• Revenue exceeds threshold by 20%+ OR
• Both revenue AND transaction thresholds met (for AND states) OR
• Already operating in state without registration

ORANGE (Warning) - Review Recommended

• Revenue at 80-120% of threshold OR
• One threshold met but not both (for AND states) OR
• P.L. 86-272 judgment required (services + goods)

YELLOW (Info) - Monitor Situation

• Revenue at 60-80% of threshold OR
• Trending toward threshold (analyze historical data) OR
• Recent state law change affecting nexus

Validation Examples

California Sales Tax

// Correct implementation
if (stateRevenue['CA'] >= 500000) {
  createAlert({
    state: 'CA',
    type: 'SALES_NEXUS',
    subtype: 'ECONOMIC_NEXUS',
    severity: 'RED',
    threshold: 500000,
    currentAmount: stateRevenue['CA'],
    message: 'California sales tax economic nexus triggered'
  });
}

New York Sales Tax (AND logic)

// Correct - BOTH thresholds required
if (stateRevenue['NY'] >= 500000 && transactionCount['NY'] >= 100) {
  createAlert({
    state: 'NY',
    type: 'SALES_NEXUS',
    subtype: 'ECONOMIC_NEXUS',
    severity: 'RED',
    threshold: 500000,
    currentAmount: stateRevenue['NY'],
    message: 'New York sales tax nexus - both revenue and transaction thresholds met'
  });
}

Texas Franchise Tax

// Correct threshold for 2024
if (totalRevenue >= 1230000) {
  createAlert({
    state: 'TX',
    type: 'FRANCHISE_TAX',
    severity: 'RED',
    threshold: 1230000,
    currentAmount: totalRevenue,
    message: 'Texas franchise tax threshold exceeded'
  });
}

Maintenance Notes

Update Frequency: Review quarterly (January, April, July, October)

Sources to Check:

• State department of revenue websites
• Tax Foundation updates
• Bloomberg Tax
• State tax policy changes

Recent Changes:

• January 2024: TX franchise tax threshold increased to $1,230,000
• July 2023: MO economic nexus enacted ($100,000)

States to Watch:

• Florida (may enact economic nexus)
• States changing transaction count requirements

Common Mistakes to Avoid

1. Using OR logic for AND states

   • NY requires BOTH $500k revenue AND 100 transactions
   • IL requires BOTH $100k revenue AND 200 transactions
   • CT requires BOTH $100k revenue AND 200 transactions

2. Forgetting no-sales-tax states

   • AK, DE, MT, NH, OR have no statewide sales tax
   • Don't generate alerts for these states

3. Outdated thresholds

   • Always check this Skill for current amounts
   • Don't hardcode thresholds from old references

4. Applying P.L. 86-272 to services

   • Protection only for tangible goods
   • SaaS, consulting, etc. are NOT protected

5. Ignoring measurement period

   • Most states measure on rolling 12-month or calendar year basis
   • Check state-specific lookback periods

References

• South Dakota v. Wayfair (2018): Supreme Court case enabling economic nexus
• P.L. 86-272 (1959): Federal law limiting state taxation of interstate commerce
• Streamlined Sales Tax: Multi-state initiative for sales tax simplification

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When using this Skill:

1. Always verify the current date matches "Last Updated" above
2. If more than 3 months old, check for state law changes
3. Cite specific thresholds when reviewing code
4. Generate alerts using severity guidelines above