What is an Economic Nexus?

Sidr Tax's explainer on economic nexus. Nexus is the connection between a business and a state that creates a sales-tax collection duty. After the 2018 Supreme Court South Dakota v. Wayfair ruling, states began requiring out-of-state sellers to collect sales tax once they cross a sales or transaction threshold, even without a physical presence. The article walks through monitoring thresholds, registering and filing once nexus is established, product taxability differences by state, and using automation software to track thresholds, calculate tax, and streamline filing across multiple states.