Warehouse stock and crossing sales thresholds silently create tax obligations. A plain-English guide to nexus for online sellers.
Sell in more than one state and you have probably triggered sales tax nexus somewhere — the connection that legally requires you to collect and remit sales tax there. Most sellers discover it years late, with penalties attached.
What creates nexus
Two triggers matter: physical nexus (inventory in a warehouse, staff, or a trade-show visit) and economic nexus (passing a state's sales or transaction threshold, often $100,000 or 200 transactions). Amazon FBA sellers get physical nexus in every state that holds their stock — usually without realizing it.
How to get compliant without panic
Map where your inventory sits and where your sales cross thresholds. Register where you have nexus, collect from the right date, and remit on each state's schedule. Voluntary disclosure programs can cut penalties if you come forward before the state finds you.
Keep it monitored
Nexus is not one-and-done: thresholds, rates, and warehouse placements change constantly. A quarterly nexus check keeps a solved problem solved.
