Resources Blog Nexus
by TaxJar November 11, 2024
State laws on economic nexus vary and it’s hard to keep up if you’re doing business in multiple states. We’ve done the research for you and here’s all the information you need to know about economic nexus in New York.
With the recent South Dakota v. Wayfair Supreme Court ruling in favor of South Dakota, states are now free to pursue sales tax from e-commerce businesses who have a “significant presence” in their state.
Significant presence or “nexus” was previously defined as having a physical presence (ex: brick and mortar store, employee, or inventory in a fulfillment center like FBA). But with this recent ruling, now this definition has been expanded to include economic activity in a state as well. This concept of triggering sales tax responsibility because of your economic activity in a state is now referred to as economic nexus.
Most important, this now means that if you pass a state’s economic threshold for total revenue in that state and/or number of transactions in that state , you’re now legally required to register, collect and remit sales tax for that state.
The law became effective on June 21, 2018, the date of the United States Supreme Court decision in Wayfair . The increase for businesses from $300,000 to $500,000 that have no physical presence in New York is effective retroactively to June 21, 2018. The increase for marketplace providers is effective retroactively to June 1, 2019.
Here’s a quick checklist of what to do next:
Certainly! TaxJar offers these two options:
At TaxJar, we help more than 15,000 sellers manage their sales tax needs every month. We help your business save on submitting your returns with our automated filing service called AutoFile . Read more about how AutoFile can handle all of your returns in as many states as you’d like.
We recommend speaking with a vetted sales tax expert to answer specific questions for your business.
Yes! With TaxJar’s Economic Nexus Insights Dashboard , you can see where your business currently has nexus, where your business is approaching nexus, and recommended next steps on how to begin complying with sales tax in all states.
Proactive notifications let you know when you’re approaching or have reached thresholds, so you can stay in front of any changes to your nexus requirements.
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