Understanding Sales Tax Nexus
Sales tax nexus determines whether your business is legally required to collect and remit sales tax in a specific state. If you have nexus, you must comply with that state’s tax rules—but identifying nexus isn’t always simple. The 2018 South Dakota v. Wayfair decision changed the landscape for remote sellers, making it easier than ever to trigger nexus without a physical presence.
Types of Nexus That Impact Your Business
🏛️ Physical Nexus
Traditionally, physical presence in a state—like a warehouse, office, or employees—established nexus. Even sending a salesperson to a state can trigger physical nexus in some cases.
🌐 Economic Nexus
After Wayfair, states adopted economic nexus laws. For example, exceeding a certain number of transactions or reaching a sales volume of $100,000 (or 200 transactions) can trigger a requirement to collect and remit sales tax—even without a physical presence.
🏙️ Affiliate or Click-Through Nexus
Additionally, some states establish nexus through affiliate relationships or referral links on websites, especially in e-commerce and digital services.
Why Sale Tax Nexus Compliance Matters
Failing to register, collect, and remit sales tax in states where you have nexus can lead to serious consequences:
- Audits and penalties
- Back taxes and interest
- Damage to your brand and customer trust
Many businesses don’t realize they have sales tax nexus in multiple states—until it’s too late. That’s why proactive monitoring and expert analysis are critical.
Failing to stay on top of nexus compliance can lead to costly audits and unexpected liabilities—see how non-compliance adds up.
Nexus gaps are also one of the most common sales tax audit triggers, which makes it even more important to monitor exposure across all states.
How Clarus Partners Helps You Stay Compliant
At Clarus Partners, we help businesses determine where they have nexus and ensure they stay compliant in all applicable states. Our services include:
- Nexus Studies – Evaluate your business activity against each state’s rules
- State Registration Support – Register your business where necessary and manage ongoing compliance
- Taxability Review – Ensure your products/services are taxed correctly in each state
- Sales Tax Filing & Remittance – Avoid missed deadlines and errors with automated, expert-supported filings
- AkuCalc – Our proprietary software not only calculates accurate sales tax, but also monitors and flags nexus activity across all 50 states, helping you stay ahead of your obligations
Learn how our complete approach to compliance can protect your business. Visit our Sales & Use Tax Compliance Solution blog.
Stay Ahead of Nexus Risks in 2025
With the complexity of tax laws and state thresholds constantly changing, sales tax nexus is not something you can afford to overlook. Clarus Partners makes it simple to understand where you’re exposed and what to do about it.
📞 Contact us today for a nexus review