Sales tax nexus applies to companies trading in the US.
Sales tax nexus is the connection between a seller and a US state that requires the seller to register, collect, and remit tax on sales made in that state.
The term is used when a retailer has a physical presence in a particular state but also applies to online retailers when they have:
- Employees or salespeople in a State.
- Store inventory or stock in a State.
- Pass an individual State’s economic threshold for total revenue or number of transactions in that state.
The sales thresholds vary from $10,000 to $500,000 in sales, and some States don’t have a transaction threshold at all. For an excellent guide as to the specifics of sales tax nexus and whether they apply to your business we recommend TaxJar’s Sales Tax by State: Economic Nexus Laws blog post.
It is the responsibility of all Prodigi clients to ensure they pay any applicable sales taxes to the countries they are transacting in.
GUIDANCE WARNING: Please note that the above guidelines do not constitute tax, legal, or other professional advice and must not be used as such. It is the sole responsibility of all Prodigi clients to comply with all legal and sales tax requirements for issuing sales tax or VAT invoices in respect to your sales transactions. If you are unsure as to what the contents of an invoice you issue to your customers should be, we suggest that you contact your tax advisor. Prodigi cannot assist you with any legal or tax advice as we’re not accountants or legal experts, and we stress that none of the above may be taken as professional advice.