Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, a business can be required to collect and remit sales tax in a state where it has no office, no property, and no employees — based on economic activity alone. Most states now impose an economic nexus threshold, and many also have marketplace facilitator rules layered on top. The result is that companies routinely discover collection obligations they never knew existed. Here is a practical way to get a first read before committing to a full analysis.
Question 1: Where are your sales actually going?
Start with a simple map of gross sales by ship-to (destination) state for the last few years. Economic nexus is measured where your customers are, not where you are. If you have never looked at revenue this way, that report alone often surfaces two or three states that jump out immediately.
Question 2: Do those states have a dollar or transaction threshold you cross?
Most states set economic nexus at a revenue threshold or a transaction count, or both. Thresholds and the way they are measured differ meaningfully — some count only taxable sales, some count all gross sales including exempt and resale, some include marketplace sales and some exclude them. The point of the quick check is not precision; it is to flag the states where you are clearly over, clearly under, or close enough to warrant a careful look.
Question 3: Are you selling through a marketplace?
If a marketplace facilitator is already collecting and remitting on your marketplace sales, those sales may be treated differently for your own nexus and filing analysis — sometimes excluded from your threshold, sometimes still counted. Direct sales from your own website or invoices are a separate question. Conflating the two is one of the most common ways businesses either over-register or miss an obligation entirely.
Question 4: Is what you sell even taxable there?
Crossing a threshold creates a potential obligation to register and collect; it does not automatically mean tax is due on every sale. Whether your specific product or service is taxable varies state by state — software, SaaS, digital goods, and bundled offerings are especially inconsistent. A state where you have clear economic nexus but sell a non-taxable service is a very different problem from one where you sell a fully taxable product.
Question 5: How far back does the exposure go?
If you have likely had nexus for a while without registering, the question shifts from "should I register going forward" to "what about the past." That is where prospective registration, voluntary disclosure, and look-back periods come into play — and where moving deliberately matters, because simply registering can sometimes invite questions about prior periods.
The bottom line: a focused hour with your own sales data usually tells you which handful of states are worth real attention. The goal is not to register everywhere out of caution — it is to identify genuine, material exposure and deal with it on your terms.
If your quick check turned up a few states you're unsure about, a short consultation can help you separate the real exposure from the noise.