The Ongoing Evolution of Economic Nexus & Transaction Thresholds

If you're still monitoring transaction counts to track sales tax nexus, you may be watching the wrong metric. At least 15 states have already eliminated transaction thresholds entirely, and more changes are coming in 2026.

For years following the Wayfair decision, most states adopted a two-part economic nexus standard for sales tax: $100,000 in sales or 200 transactions into the state. That framework is now changing.

A growing number of states have eliminated the transaction-count threshold entirely, leaving sales revenue alone as the trigger for sales tax collection obligations. For businesses selling remotely into multiple states, this shift materially changes when, and how quickly sales tax nexus can be triggered.

Example

An online retailer sells low-cost hobby supplies. In 2023, the company made 300 separate sales to customers in Indiana, with total gross revenue of $90,000.

Under the Old Rule (Pre-2024): The company had economic nexus. While its $90,000 in revenue was below the $100,000 threshold, it easily surpassed the 200-transaction threshold. Therefore, it was required to collect and remit Indiana sales tax.

Under the New Rule (Effective Jan. 1, 2024): The transaction threshold was eliminated. Now, nexus is based only on the revenue threshold. Since the company's $90,000 in sales is below the $100,000 mark, it no longer has an economic nexus obligation in Indiana based on this level of activity.

States That Have Eliminated Transaction Thresholds

Below is a summary of states that have already made this change, along with upcoming implementations:

As of January 6, 2026

*Alaska applies to participating local jurisdictions through the Alaska Remote Seller Sales Tax Commission. Alaska does not impose a statewide sales tax.

What’s Driving the Change?

Transaction thresholds were originally intended to protect small sellers making occasional or low-value sales. In practice, states found that:

• Transaction counts were administratively complex to track and audit.
• High-volume, low-dollar sellers triggered nexus quickly, while others with fewer but larger sales did not.
• Revenue-based thresholds are easier to administer and enforce.

As a result, states are simplifying nexus standards by focusing exclusively on sales dollars, not transaction volume.

Why This Matters for Businesses

Removing the transaction threshold can delay nexus for some sellers, but it can also create blind spots for others. Key implications include:

• Businesses with many small transactions may benefit, they can now make more sales before hitting nexus.
• Businesses with fewer but higher-dollar sales may hit nexus faster than expected.
• Sellers who previously relied on transaction counts as an early warning indicator may lose visibility into approaching nexus obligations.
• Nexus monitoring becomes more dependent on accurate revenue tracking by state.

In short, this change does not reduce risk, it reshapes it.

Common Misconception: Lower Risk?

Many businesses assume that eliminating transaction thresholds lowers their audit risk or simplifies compliance. This is incorrect.

In reality, states have not relaxed enforcement they have simplified the trigger. Revenue-only thresholds make it easier for states to identify non-compliance using third-party data, marketplace reports, and payment processor information. States no longer need to count individual transactions; they can focus exclusively on gross revenue figures, which are far easier to obtain and verify.

Example:

A business that previously tracked transaction counts as an early warning system knowing they were at 150 transactions and $85,000 in sales, had visibility into their approaching nexus obligations. They knew to watch both metrics. Now without the transaction threshold, that same business might reach $105,000 in sales across 160 transactions without realizing they’ve crossed into next territory, because they were accustomed to monitoring transaction volume as their primary indicator. The first indication of non-compliance may come from the state itself.

States are also increasingly sharing data and coordinating enforcement efforts through organizations like the Streamlined Sales Tax Governing Board and the Multistate Tax Commission. This means that exposure in one state may trigger scrutiny in others.

What Businesses Should Do Now

With nexus rules continuing to evolve, businesses should:

• Re-evaluate economic nexus monitoring processes to prioritize revenue tracking over transaction counts
• Confirm which states currently rely on sales-only thresholds and whether additional states are planning changes
• Review historical sales data for potential exposure in states that have already made the change
• Ensure internal systems accurately track gross revenue by state on an ongoing basis
• Address past exposure proactively through voluntary disclosure agreements before audits begin

The removal of transaction thresholds reflects a broader trend: states are prioritizing administrability and enforcement efficiency. Businesses should expect this approach to continue and potentially expand to additional states in the coming years.

Staying compliant today requires ongoing monitoring, not one-time registration decisions.