Wayfair Sales Tax Nexus Guide

TaxKiln Editorial · Last reviewed: May 25, 2026

Since South Dakota v. Wayfair (2018) overturned the physical-presence rule, every state with a sales tax has enacted economic nexus thresholds — most commonly $100,000 of in-state sales OR 200 transactions in the prior or current calendar year. California, New York, and Texas use $500,000 thresholds; many states have dropped the 200-transaction count entirely. Marketplace facilitator laws shift collection duty to the platform (Amazon, Etsy, eBay) but a seller still has to track its own threshold for non-marketplace channels.

TaxKiln framework

Wayfair Economic Nexus Map

TaxKiln's per-state reference framework for post-Wayfair sales-tax nexus: economic threshold ($100k vs $500k vs $250k), transaction-count trigger (200 / removed / never), sourcing rule (origin vs destination), marketplace facilitator coverage, and trailing-nexus exposure window. Mapped across all 50 states + DC for 2026.

Pre- vs post-Wayfair

Before Wayfair, the Quill Corp v. North Dakota (1992) physical-presence rule meant a remote seller had to have property, employees, or representatives in a state before that state could compel sales-tax collection. The 2018 Wayfair decision overturned Quill, allowing states to assert nexus based purely on economic activity — sales volume or transaction count above a defined threshold. Within two years every sales-tax state enacted economic nexus, with South Dakota's $100k / 200-transaction model becoming the default template.

How the thresholds actually work

Each state defines its threshold differently across three axes: **Dollar amount**: $100k (most), $500k (CA, NY, TX), $250k (AL, MS), $250k or 200 tx (IA), $500k AND systematic solicitation (NY). **Transaction count**: 200 transactions (most), removed (CA, CO, IA, ME, MA, NC, ND, SD, WI, others), 100 transactions (CT, NY). **Measurement period**: Prior calendar year (most), current OR prior (some), trailing 12 months (a few). **AND vs OR**: Most states use OR (cross either to trigger). NY and CT use AND (must cross both dollar AND transaction count). NC, MA, ND now use dollar-only.

Marketplace facilitator laws

All 45 sales-tax states + DC require marketplace facilitators (Amazon, Etsy, eBay, Walmart Marketplace, Uber Eats, DoorDash) to collect and remit sales tax on third-party seller transactions in the state. This eliminates nexus exposure for sellers who exclusively sell through covered marketplaces — the platform is the responsible party. BUT: a seller with both marketplace and direct-to-consumer channels (own Shopify store, wholesale invoicing) still has to track ITS OWN sales toward the state threshold for the non-marketplace channels. Some states include marketplace sales in the threshold count even though the platform collects; some exclude them. The TaxKiln Wayfair Nexus Map tracks per-state treatment.

Origin vs destination sourcing

**Destination-sourced states (most)**: Tax rate is the buyer's location's rate (state + county + city + special district). The seller has to apply ~10,000 distinct rate combinations nationwide. **Origin-sourced states (TX, OH, MO, AZ, NM, others for in-state sellers)**: In-state sellers charge their own location's rate; remote sellers (out-of-state with nexus) still apply destination sourcing. For remote sellers, the practical answer is destination sourcing everywhere — handled via sales tax automation (TaxJar, Avalara, Anrok, Stripe Tax).

Registration timing and back-tax exposure

Once a seller crosses a state's threshold, registration is typically required within 30–60 days, with collection beginning on the first sale after registration. States have begun voluntary disclosure agreements for sellers who realise they crossed thresholds years ago — typically 3–4 year lookback in exchange for penalty abatement. Ignoring crossed thresholds creates compounding exposure: assessed tax on uncollected sales (which the seller cannot pass to past customers), interest, and penalties up to 25%. The risk concentrates in the highest-volume states (CA, NY, TX, FL) where exposure compounds fastest.

Worked example: MapleRow Coffee Roasters (Brooklyn, NY — direct-to-consumer + Amazon)

MapleRow ships nationwide. 2025 sales: $420k direct from own Shopify; $310k through Amazon FBA. They want to know their 2026 nexus footprint.

Marketplace (Amazon $310k): Amazon collects in all 45 sales-tax states. No seller-side action required for those sales. Direct-to-consumer (Shopify $420k): track per-state. CA ($85k direct): below $500k threshold → no nexus from direct channel NY ($95k direct): home state — already registered TX ($62k direct): below $500k → no nexus FL ($48k direct): above $100k? No — under. No nexus. IL ($35k direct + 240 transactions): exceeds 200-tx test → IL NEXUS triggered PA ($28k, 180 tx): below both → no nexus CO ($22k, 380 tx): CO removed transaction count → below $100k → no nexus WA ($31k, 410 tx): below $100k threshold (WA uses $100k only) → no nexus Action: register in IL, begin collecting from next sale. Add Avalara or Stripe Tax for ongoing monitoring of the other 40+ jurisdictions as direct channel grows.

Statute references

Overturn of physical-presence rule — South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
Original physical-presence rule (overturned) — Quill Corp. v. North Dakota, 504 U.S. 298 (1992)
California economic nexus threshold — Cal. Rev. & Tax Code §6203
New York marketplace facilitator law — N.Y. Tax Law §1101(b)(8)(i)(E)
Texas economic nexus rule — Texas Comptroller Rule 3.286(b)(2)

Last reviewed: May 25, 2026