Post-Wayfair Sales Tax Nexus: Complete Guide for 2026

What Changed After Wayfair?

The 2018 South Dakota v. Wayfair Supreme Court decision fundamentally transformed sales tax compliance for online sellers and remote businesses. Here's what you need to know in 2026.

Economic Nexus Explained

Economic nexus means you can owe sales tax in a state even without physical presence. States can now require remote sellers to collect tax based on:

• Sales revenue into the state
• Number of transactions into the state
• Or a combination of both

Current State Thresholds (2026)

Most states have adopted one of these thresholds:

• $100,000 in sales OR 200 transactions per year
• $500,000 in sales (no transaction count)
• Varies by state—always verify current rules

When Do You Need to Register?

You must register for a sales tax permit when you exceed a state's economic nexus threshold. Key considerations:

1. Monitor Your Sales by State

Track your revenue and transaction count monthly. Use your:

• E-commerce platform reports
• Accounting software
• Tax automation tools (Avalara, TaxJar, Vertex)

2. Understand Lookback Periods

States use different measurement periods:

• Current or prior calendar year (most common)
• Trailing 12 months
• Current calendar year only

3. Registration Timeline

Once you exceed thresholds:

• Register before your next sale in that state
• Some states allow grace periods (typically 30 days)
• Penalties for late registration can be severe

Marketplace Facilitator Rules

If you sell on Amazon, eBay, Etsy, or other marketplaces, they may collect tax on your behalf. However:

• You're still responsible for direct sales
• Some states exclude marketplace sales from your nexus calculation
• Always verify what the marketplace is collecting

Common Mistakes to Avoid

1. Ignoring Small States

Even if you only made $105,000 in Wyoming, you still have nexus. Don't skip states just because they're small.

2. Using Incorrect Tax Rates

• Destination-based states (most): Tax based on buyer's location
• Origin-based states (rare): Tax based on your location
• Know which applies to each state

3. Missing Local Taxes

Many states have city, county, and district taxes on top of state rates. Always use current, complete rate tables.

Compliance Best Practices

Build a Nexus Monitoring System

1. Monthly review of sales by state
2. Quarterly assessment of new nexus obligations
3. Annual audit of all registrations and filings

Use Technology Wisely

Consider automation for:

• Tax rate lookups
• Tax calculation
• Return filing
• Exemption certificate management

Document Everything

Maintain records of:

• When you established nexus
• Registration dates and permit numbers
• Exemption certificates
• Audit correspondence

Voluntary Disclosure Agreements (VDAs)

If you discover past nexus, consider a VDA:

Benefits:

• Reduced lookback period (often 3-4 years vs. statute of limitations)
• Penalty waivers
• Anonymous application process in many states

Process:

1. Identify past exposure
2. Work with a sales tax professional
3. Apply through state VDA program
4. Negotiate terms
5. Register and pay agreed amount

Next Steps for Your Business

Immediate Actions

1. Conduct a nexus study across all states where you have customers
2. Register where you currently have nexus
3. Set up systems to monitor ongoing compliance

Ongoing Compliance

• Review nexus monthly
• File returns on time
• Keep exemption certificates organized
• Stay updated on state law changes

Need Help?

Sales tax compliance post-Wayfair is complex and constantly evolving. Our team can help you:

• Conduct comprehensive nexus studies
• Register in new states
• Set up automation and controls
• Manage voluntary disclosures

Ready to get compliant? Schedule a consultation to discuss your specific situation.

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This article provides general information and is not legal or tax advice. Consult with a sales tax professional about your specific circumstances.