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What Is Economic Nexus? Can Sales Tax Software Track It?

By the AI Tools for Accounting team ·

The short answer

Economic nexus is a sales tax collection duty that a state creates from a seller's sales into the state, even when the seller has no office, employees or inventory there. The Supreme Court allowed it in South Dakota v. Wayfair (June 21, 2018), upholding a law that covered sellers with more than $100,000 of sales or 200 or more separate transactions into South Dakota a year [1][2]. Most states now use a $100,000 sales threshold, a few use $250,000 or $500,000, and many have dropped the 200-transaction test [3][18]. Yes, software can track it: Avalara, TaxJar, Stripe Tax, Kintsugi, Numeral, Anrok and Zamp all describe nexus or threshold monitoring, and several offer it free [5][7][10][13][14][16][17]. For accountants, CPA firms, tax professionals and bookkeepers, the catch is that each tool only sees the sales data you connect to it.

What changed in 2026

  • January 1, 2026: Illinois dropped its 200-transaction test. Remote retailers now look only at $100,000 or more in gross receipts from sales to Illinois buyers [4].
  • August 1, 2026: Kentucky's HB 757 removed the 200-transaction test, leaving the $100,000 test [4].
  • Where it stands: Avalara's list of states that have eliminated the transaction threshold (as of April 21, 2026) includes California, Colorado, Illinois, Kentucky, South Dakota, Utah and Washington [3]. New York ($500,000 and more than 100 sales) and Connecticut ($100,000 and 200 retail sales) still require both tests to be met [4]. New Jersey's S711 would drop its transaction test but had not been enacted as of the source's writing [4].

How thresholds differ by state

Avalara groups state thresholds into six types: $100,000; $100,000 or 200 transactions; $100,000 and 100 transactions; $250,000; $500,000; and $500,000 and 100 transactions [3]. A state table from M&T Bonnell (current as of August 31, 2026) shows Alabama and Mississippi at $250,000, California and Texas at $500,000, and New York at $500,000 and 100 transactions [18]. States also measure over different windows. Illinois uses a quarterly lookback of the prior four quarters, while Kentucky measures the previous or current calendar year [4]. Stripe notes that some states, such as Arizona, Indiana and North Carolina, count nontaxable sales toward their thresholds [5].

Physical presence still creates nexus on its own. TaxJar and Avalara both remind sellers that employees, an office or inventory in a state can create a collection duty regardless of economic thresholds [7][17].

What each tool does to track nexus

  • Avalara offers a free online nexus assessment: pick the states where you sell, say whether your sales meet each state's threshold and get a breakdown of state rules and next steps. Avalara says the assessment is not recommended for AvaTax users, because AvaTax works from all of a customer's transactions [17].
  • TaxJar has an Economic Nexus Insights dashboard showing states where you may have reached or be approaching thresholds. It emails you at 75% of a state's threshold and again at 100%, and TaxJar recommends importing current and prior calendar year sales for the best results [7]. TaxJar's blog says the email alerts are for Professional customers and above [9].
  • Stripe Tax monitors Stripe-processed sales (minus refunds) by customer location against local thresholds, plus off-Stripe invoices and transactions created with the Stripe Tax APIs [5]. Stripe lists limits: it does not monitor your home state, cannot tell retail from wholesale or marketplace from non-marketplace sales, and leaves it to you to confirm whether registration is actually required [5].
  • Kintsugi says it tracks sales against each jurisdiction's revenue, transaction-count and measurement-window rules as transactions come in, and can pick up physical nexus, such as a new remote hire, through HR and payroll integrations. It also tracks use tax exposure on purchases [10].
  • Numeral offers a free nexus study when you connect your stores or billing platforms, then monitors physical and economic nexus and alerts you when you cross nexus in new jurisdictions [13].
  • Anrok says it tracks revenue and transaction thresholds "updated as sales land," flags physical presence from your HR system, and makes registration the next step inside Anrok when you cross a threshold [14].
  • Zamp includes a one-time nexus analysis and historical liability exposure estimate on its Free plan, and real-time threshold tracking by state and territory with "80% early-warning alerts" on its paid U.S. plan [16].

Published pricing for nexus monitoring

  • Avalara: Free nexus assessment [17]. We did not find published AvaTax prices in this research.
  • TaxJar: 30-day free trial [8]. Starter $39/mo and Professional $99/mo at the 200 orders/mo tier [8].
  • Stripe Tax: Monitoring and alerts included in Tax Basic and Tax Complete [6]. Tax Basic 0.5% per transaction where you are registered, on Billing, Checkout, Invoicing and Payment Links integrations, or 50¢ per transaction created through Stripe's payment APIs or any payment processor; Tax Complete billed per month on a 1-year contract [6].
  • Kintsugi: Free plan $0, "free for the life of your account" [10][11]. Starter $75 per action in the US and Canada; Scale and Premium custom flat monthly [11].
  • Numeral: Free Monitoring plan [13]. $75 per filing and $150 per registration [13].
  • Anrok: Global exposure monitoring included in Starter [15]. Starter $100 per market per month; Custom quoted [15].
  • Zamp: Free plan with a one-time nexus assessment [16]. U.S. and U.S. + Canada plans priced by talking to sales [16].

Our Stripe Tax listing lists the Tax Complete tiers. For full plan details, see each tool page and the vendor's pricing page.

Vendor claims to check in a demo

Numeral says "Your sales tax will be filed on time, or we'll pay your penalties and interest charges" [13]. Zamp says that under the Zamp Commitment, if a Zamp-managed calculation or filing results in penalties or interest, Zamp covers the cost, and that 1,200+ finance and accounting teams have saved thousands of hours with Zamp [16]. Anrok describes real-time nexus monitoring across 11,000+ US jurisdictions [14]. Ask each vendor what data its monitoring actually reads, how often it refreshes and which state rules (lookback windows, nontaxable sales, marketplace sales) it applies.

What accountants and bookkeepers should check

  • Connect every sales channel. Stripe monitors only Stripe-processed or imported sales [5], and TaxJar works best with current and prior year history imported [7]. A client selling on Shopify, Amazon and wholesale needs all channels in one place.
  • Do not forget physical nexus. Remote employees and inventory in third-party warehouses can create nexus with no sales threshold at all [7][10]. Kintsugi and Anrok describe HR integrations for this [10][14].
  • Recheck registrations after threshold changes. Kentucky says sellers who registered only because of transaction volume are no longer required to hold a permit, per the sales.tax summary of its guidance [4]. Clients registered on transaction counts alone in Illinois or Kentucky may want a review.
  • Plan for past exposure. Several tools estimate historical liability [10][13][16], and Kintsugi lists Voluntary Disclosure Agreements (VDAs) on its Premium plan [12].
  • Confirm before registering. Every vendor here frames alerts as potential obligations. Stripe says it is up to you to confirm whether registration is required [5].

For a deeper look at three of these tools, see Avalara vs TaxJar vs Stripe Tax, the Avalara vs TaxJar comparison and our best sales tax software guide. All tools covered here are in the Sales Tax category.

FAQ

What is economic nexus in simple terms? It is a state's rule that a remote seller must register, collect and remit sales tax once its sales into the state pass a set threshold, even with no physical presence there. Wayfair (2018) allowed states to impose it [1][2].

What is the most common economic nexus threshold? $100,000 in sales into the state is the most common. California and Texas use $500,000, Alabama and Mississippi use $250,000, and New York uses $500,000 and 100 transactions [18].

Do states still use the 200-transaction test? Some do. Avalara's list of states that have eliminated it includes Illinois (January 1, 2026) and Kentucky (August 1, 2026), while states such as Georgia and New Jersey still apply it [3][4].

Can I track economic nexus for free? Yes, with limits. Kintsugi and Numeral offer free ongoing monitoring, Avalara and Zamp offer free assessments, and Stripe includes monitoring in Tax Basic [6][10][13][16][17]. Registrations and filings cost extra.

Does nexus monitoring software register and file for me? Some tools do on paid plans. Kintsugi Starter, Numeral Professional, Anrok, Zamp's paid plans and Stripe Tax Complete include registrations and filings [6][11][13][15][16].

Sources

  1. Supreme Court of the United States, South Dakota v. Wayfair, Inc., 585 U.S. 162, No. 17-494 (June 21, 2018), U.S. Reports via GovInfo: https://www.govinfo.gov/content/pkg/USREPORTS-585/pdf/USREPORTS-585-162.pdf
  2. Congressional Research Service, "State Sales and Use Tax Nexus After South Dakota v. Wayfair": https://www.congress.gov/crs-product/IF11832
  3. Avalara, "States eliminating economic nexus transaction thresholds": https://www.avalara.com/us/en/blog/states-eliminating-economic-nexus-transaction-thresholds.html
  4. sales.tax, "200-Transaction Nexus Test: Illinois and Kentucky Dropped It": https://sales.tax/sales-tax-updates/200-transaction-economic-nexus-test-repeal-illinois-kentucky/
  5. Stripe Documentation, "Monitor your obligations": https://docs.stripe.com/tax/monitoring
  6. Stripe Tax pricing: https://stripe.com/tax/pricing
  7. TaxJar Support, "Economic Nexus Insights": https://support.taxjar.com/article/951-economic-nexus-insights
  8. TaxJar pricing: https://www.taxjar.com/pricing
  9. TaxJar, "How nexus impacts businesses differently depending on their size": https://www.taxjar.com/blog/nexus/nexus-impacts-businesses-differently-depending-on-their-size
  10. Kintsugi, "Free Nexus Monitoring & Exposure Tracking": https://trykintsugi.com/product/monitor-exposure
  11. Kintsugi pricing: https://trykintsugi.com/pricing
  12. Kintsugi Help Center, "Understanding Kintsugi Plans and Billing": https://help.trykintsugi.com/en-US/trykintsugi/article/RV3NvxDi-understanding-kintsugi-plans-and-billing
  13. Numeral pricing: https://www.numeral.com/pricing
  14. Anrok, Exposure monitoring: https://www.anrok.com/product/automated-nexus-monitoring
  15. Anrok pricing: https://www.anrok.com/pricing
  16. Zamp pricing: https://zamp.com/pricing
  17. Avalara, "Free Nexus sales tax risk assessment": https://www.avalara.com/us/en/learn/nexus/nexus-risk-assessment.html
  18. M&T Bonnell, "US Sales Tax Table 2026: Nexus Thresholds by State": https://www.mtbonnell.com/us-tax/sales-tax-nexus-by-state

Last checked: 2026-11-03

Tools in this article

  • Avalara

    Automated sales tax, VAT and indirect tax compliance software.

    Sales Tax · Pricing not published, contact vendor

  • TaxJar

    Sales tax calculation, reporting and filing for e-commerce sellers (a Stripe company).

    Sales Tax · Starter and Professional plans; 30-day free trial

  • Stripe Tax

    Sales tax, VAT and GST calculation, collection and filing built into Stripe.

    Sales Tax · Tax Complete starting at $90 per month; tiers of $90, $430, $1,000 and $1,500 per month on a 1-year contract (per Stripe's pricing page)

  • Kintsugi

    AI sales tax, VAT and GST automation with exposure monitoring and filing.

    Sales Tax · Free plan $0 (exposure monitoring); Starter $75 per action (US and Canada); Scale and Premium are custom flat monthly (per Kintsugi's pricing page)

  • Numeral

    Fully managed sales tax: registrations, filings, nexus monitoring and exemption certificates.

    Sales Tax · $75 per return filed, plus a one-time $150 per registration (per Numeral's pricing page)

  • Anrok

    Sales tax and VAT compliance for SaaS and digital businesses across the financial stack.

    Sales Tax · Starter: $100 per market per month (per Anrok's pricing page)

  • Zamp

    Managed sales tax compliance for US and Canadian sellers.

    Sales Tax · Plans: Free, U.S., and U.S. + Canada; paid plan prices are by contacting sales (per Zamp's pricing page)