Multi-State Nexus Registration
Track economic nexus thresholds across all 50 states. We register you in new states as you grow and manage ongoing filing requirements.
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Why Nexus Registration Matters
Since the 2018 Wayfair Supreme Court decision, states can require sales tax collection from businesses that exceed economic thresholds, even without physical presence. Failing to register when you have nexus can result in back taxes, penalties, and interest.
What is Economic Nexus?
Economic nexus is established when your sales or transactions in a state exceed specific thresholds—typically $100,000 in annual revenue or 200 transactions. Once you cross this threshold, you're required to register for sales tax collection in that state.
Physical Nexus Still Applies
Physical nexus is created immediately when you hire even one employee, store inventory, or have an office in a state. In California, hiring a single employee triggers EDD registration, workers' comp requirements, and income tax filing obligations before the first paycheck.
The Stakes Are High
Operating without proper nexus registration can result in retroactive tax liability (sometimes for multiple years), penalties, and interest. States are increasingly aggressive in pursuing out-of-state businesses for uncollected sales tax.
How It Works
Monitor Sales and Activity by State
Track your revenue, transactions, and physical presence across all states to identify when you're approaching nexus thresholds.
- Track sales revenue by state (shipping destination)
- Count number of transactions per state
- Monitor employee locations and remote work arrangements
- Track inventory storage locations (3PL warehouses, Amazon FBA)
- Document trade show attendance and temporary presence
Identify Nexus Obligations
Determine which states you have nexus in based on economic and physical presence rules.
- Economic nexus: Check if you exceed state thresholds ($100K-$500K)
- Physical nexus: Identify states with employees or inventory
- Click-through nexus: Review affiliate marketing arrangements
- Marketplace facilitator: Determine if marketplace handles tax
Register in Each Nexus State
Complete registration applications with each state's tax authority, typically within 30 days of establishing nexus.
- Apply online through state tax authority websites
- Provide business information (EIN, formation documents)
- Pay registration fees ($0-$100 depending on state)
- Receive sales tax permit/account number
- Processing typically takes 1-4 weeks
Set Up Collection and Remittance
Configure your systems to collect the correct sales tax rates and prepare for ongoing filing obligations.
- Update e-commerce platform with tax rates
- Configure point-of-sale systems
- Determine filing frequency (monthly/quarterly/annual)
- Set up state tax authority accounts for online filing
- Establish processes for timely payments
Maintain Ongoing Compliance
File sales tax returns on schedule and monitor for new nexus obligations as your business grows.
- File returns on time (monthly, quarterly, or annually)
- Remit collected sales tax by due dates
- Continue monitoring sales in non-nexus states
- Register in new states as thresholds are crossed
- Handle audits and information requests promptly
State-Specific Requirements
California
$500,000 in salesNo transaction countRegistration Deadline: Immediate upon exceeding threshold
Highest threshold. Register through CDTFA. Physical nexus: One employee triggers EDD, workers' comp, and foreign qualification requirements.
Texas
$500,000 in salesNo transaction countRegistration Deadline: First day of fourth month after exceeding threshold
Register through Texas Comptroller. No state income tax but franchise tax (margin tax) may apply for C-corps and LLCs.
New York
$500,000 in sales AND 100 transactions100 transactionsRegistration Deadline: June 1 after exceeding threshold
Both thresholds must be met. Register through NY Tax Department. Also track economic nexus for income tax purposes.
Florida
$100,000 in salesNo transaction countRegistration Deadline: Immediate upon exceeding threshold
Register through FL Department of Revenue. No state income tax. Register for reemployment tax if you have FL employees.
Illinois
$100,000 in salesNo transaction count (removed Jan 1, 2026)Registration Deadline: 30 days after exceeding threshold
Transaction count requirement removed in 2026. Register through IL Department of Revenue. Also monitor for income tax nexus.
Washington
$100,000 in salesNo transaction countRegistration Deadline: 30 days after exceeding threshold
Register through WA Department of Revenue. No state income tax. B&O (Business & Occupation) tax applies to gross receipts.
Most Other States
$100,000 in sales200 transactions (varies by state)Registration Deadline: 30 days after exceeding threshold (typical)
Most states use $100K threshold. Some require both thresholds, others just revenue. Check state-specific rules.
Common Mistakes to Avoid
Not Tracking Sales by State
Miss nexus thresholds, operate illegally, face retroactive tax liability and penalties when discovered
Implement monthly sales tracking by state. Use e-commerce platforms or accounting software that tracks by shipping destination. Review quarterly to identify approaching thresholds.
Ignoring Physical Nexus
Creating immediate tax obligations without realizing it—especially problematic with remote employees
Track employee locations carefully. When hiring remotely, understand that one employee in California triggers EDD registration, workers' comp, foreign qualification, and potential income tax nexus immediately.
Registering Too Late
States can assess back taxes from the date nexus was established, plus penalties and interest (often 10-25% annually)
Register within 30 days of exceeding thresholds. Set up alerts when approaching 75% of thresholds ($75K for $100K states, $375K for $500K states).
Not Understanding Marketplace Facilitator Rules
Double collecting tax when marketplace already collects, or failing to collect when you're responsible
Understand that Amazon, Shopify, and major marketplaces collect tax on marketplace sales. You're still responsible for direct sales and some marketplace sales depending on rules.
Treating All States the Same
Missing state-specific requirements like different thresholds ($500K in CA/NY/TX vs $100K elsewhere) or unique rules
Research each state's specific requirements. California requires $500K, New York requires both revenue and transaction thresholds, Illinois removed transaction counts in 2026.
How Finvisor Helps
We monitor your nexus footprint across all 50 states and handle registrations proactively as your business grows.
Automated Threshold Tracking
We integrate with your accounting and e-commerce systems to track sales by state in real-time, alerting you at 75% and 90% of thresholds.
Proactive State Registration
We complete registrations within required deadlines, handle all paperwork, and ensure you receive your sales tax permits before you need them.
Employee Nexus Management
We track employee locations and handle immediate registration requirements (EDD, workers' comp, foreign qualification) when you hire in new states.
Frequently Asked Questions
What is the difference between economic and physical nexus?
Economic nexus is triggered by exceeding a state's revenue threshold (typically $100,000-$500,000 in annual sales) or transaction count (commonly 200 transactions), even without physical presence. Physical nexus is established immediately when you have employees, inventory, or an office in a state—there's no dollar threshold. Both types of nexus create tax obligations, but physical nexus often creates broader obligations including income tax, employment tax, and potential foreign qualification requirements.
When do I need to register after crossing a nexus threshold?
Most states require registration within 30 days of establishing nexus, though some states specify different deadlines. For example, Texas allows until the first day of the fourth month after exceeding the threshold, while New York sets a June 1 deadline after exceeding thresholds. California and Florida require immediate registration upon exceeding thresholds. It's best to register as soon as you know you've crossed a threshold to avoid any risk of penalties.
Do I need to collect sales tax in every state?
No, only in states where you have nexus (economic or physical). Five states have no sales tax: Alaska (local jurisdictions may have sales tax), Delaware, Montana, New Hampshire, and Oregon. For the remaining 45 states with sales tax, you only need to register and collect if you exceed their economic nexus threshold or have physical presence. However, once registered, you must collect tax on all applicable sales in that state.
What happens if I don't register when I have nexus in a state?
States can assess uncollected sales tax retroactively, often for multiple years (typically 3-4 years, but some states allow longer look-back periods). You'll owe the unpaid tax plus penalties (commonly 10-25% of tax owed) and interest (typically 10-12% annually). Some states offer voluntary disclosure agreements that can reduce penalties if you come forward before being discovered. Additionally, you may face business license penalties and cannot legally collect sales tax without proper registration.
How do marketplace facilitator laws affect my obligations?
Marketplace facilitator laws require platforms like Amazon, eBay, Etsy, and Shopify to collect and remit sales tax on sales they facilitate. This means if you sell through Amazon FBA, Amazon collects the sales tax—you don't need to. However, you're still responsible for: (1) direct sales through your own website, (2) sales through smaller marketplaces that don't collect tax, and (3) potentially income tax nexus created by your marketplace sales. You must track which sales are covered by marketplace collection and which you're responsible for.
What if I hire a remote employee—does that create nexus immediately?
Yes, hiring even one employee in a state creates immediate physical nexus for employment taxes and likely income tax. The specific obligations vary by state. For example, in California, hiring one employee triggers: EDD (Employment Development Department) registration before the first paycheck, workers' compensation insurance requirement, potential foreign qualification with Secretary of State, and likely income tax filing obligation. You must address these compliance requirements before the employee starts work, not when you cross a revenue threshold.
Can Finvisor track nexus and handle registrations for us?
Yes. We monitor your sales by state (from your accounting system and e-commerce platforms), track employee locations, and alert you before you cross economic nexus thresholds in any state. When registration is needed, we complete the applications, pay registration fees, and ensure you're set up correctly. After registration, we manage all ongoing sales tax filings, income tax returns, and compliance requirements. This comprehensive monitoring and registration service is included in our multi-state compliance packages.
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Learn MoreReady to stay compliant across all states?
Let us track your nexus footprint and handle registrations before penalties accrue.