The thresholds to file sales tax in each U.S. state vary and often depend on the economic nexus standards set by each state. Economic nexus refers to the level of business activity a company must have in a state before being required to collect and remit sales tax. Here’s an overview of the thresholds for filing sales tax in each state based on economic nexus:
1. Alabama
- Threshold: $250,000 in sales into the state annually.
2. Alaska
- Threshold: Local taxes may apply; generally, $100,000 in sales or 200 transactions.
3. Arizona
- Threshold: $100,000 in sales into the state annually.
4. Arkansas
- Threshold: $100,000 in sales or 200 transactions into the state annually.
5. California
- Threshold: $500,000 in sales into the state annually.
6. Colorado
- Threshold: $100,000 in sales into the state annually.
7. Connecticut
- Threshold: $100,000 in sales and 200 transactions into the state annually.
8. Delaware
- Threshold: No state sales tax, but local laws may apply.
9. Florida
- Threshold: $100,000 in sales into the state annually.
10. Georgia
- Threshold: $100,000 in sales or 200 transactions into the state annually.
11. Hawaii
- Threshold: $100,000 in sales or 200 transactions into the state annually.
12. Idaho
- Threshold: $100,000 in sales into the state annually.
13. Illinois
- Threshold: $100,000 in sales or 200 transactions into the state annually.
14. Indiana
- Threshold: $100,000 in sales or 200 transactions into the state annually.
15. Iowa
- Threshold: $100,000 in sales into the state annually.
16. Kansas
- Threshold: No threshold; any sales in the state require collection.
17. Kentucky
- Threshold: $100,000 in sales or 200 transactions into the state annually.
18. Louisiana
- Threshold: $100,000 in sales or 200 transactions into the state annually.
19. Maine
- Threshold: $100,000 in sales or 200 transactions into the state annually.
20. Maryland
- Threshold: $100,000 in sales or 200 transactions into the state annually.
21. Massachusetts
- Threshold: $100,000 in sales into the state annually.
22. Michigan
- Threshold: $100,000 in sales or 200 transactions into the state annually.
23. Minnesota
- Threshold: $100,000 in sales or 200 transactions into the state annually.
24. Mississippi
- Threshold: $250,000 in sales into the state annually.
25. Missouri
- Threshold: $100,000 in sales into the state annually.
26. Montana
- Threshold: No state sales tax, but local laws may apply.
27. Nebraska
- Threshold: $100,000 in sales or 200 transactions into the state annually.
28. Nevada
- Threshold: $100,000 in sales or 200 transactions into the state annually.
29. New Hampshire
- Threshold: No state sales tax, but local laws may apply.
30. New Jersey
- Threshold: $100,000 in sales or 200 transactions into the state annually.
31. New Mexico
- Threshold: $100,000 in sales into the state annually.
32. New York
- Threshold: $500,000 in sales and 100 transactions into the state annually.
33. North Carolina
- Threshold: $100,000 in sales or 200 transactions into the state annually.
34. North Dakota
- Threshold: $100,000 in sales into the state annually.
35. Ohio
- Threshold: $100,000 in sales or 200 transactions into the state annually.
36. Oklahoma
- Threshold: $100,000 in sales into the state annually.
37. Oregon
- Threshold: No state sales tax, but local laws may apply.
38. Pennsylvania
- Threshold: $100,000 in sales into the state annually.
39. Rhode Island
- Threshold: $100,000 in sales or 200 transactions into the state annually.
40. South Carolina
- Threshold: $100,000 in sales into the state annually.
41. South Dakota
- Threshold: $100,000 in sales or 200 transactions into the state annually.
42. Tennessee
- Threshold: $100,000 in sales into the state annually.
43. Texas
- Threshold: $500,000 in sales into the state annually.
44. Utah
- Threshold: $100,000 in sales or 200 transactions into the state annually.
45. Vermont
- Threshold: $100,000 in sales or 200 transactions into the state annually.
46. Virginia
- Threshold: $100,000 in sales or 200 transactions into the state annually.
47. Washington
- Threshold: $100,000 in sales into the state annually.
48. West Virginia
- Threshold: $100,000 in sales or 200 transactions into the state annually.
49. Wisconsin
- Threshold: $100,000 in sales or 200 transactions into the state annually.
50. Wyoming
- Threshold: $100,000 in sales or 200 transactions into the state annually.
Keep in mind that these thresholds can change, and some states have additional rules or exceptions. It’s always a good idea to consult with a tax professional or check directly with each state’s Department of Revenue for the most current information.
For selling to consumers in the EU, Canada, and Mexico, sales tax obligations vary by country (or region). The thresholds determine when a business must register for Value Added Tax (VAT) in the EU or Goods and Services Tax (GST) in Canada and Mexico. Here’s a breakdown for the top 5 EU countries by GDP, as well as Canada and Mexico:
EU Countries (non-exhaustive list)
EU Countries: Since July 1, 2021, the EU introduced new VAT rules that abolished country-specific VAT thresholds for non-EU businesses. Now, non-EU businesses must register for VAT in each EU country where they sell goods directly to consumers from the first sale. Alternatively, they can use the One-Stop-Shop (OSS) system to simplify VAT registration and reporting. However, the local VAT rate of each country where goods are sold still applies.
1. Germany
- VAT Threshold for Non-EU Sellers: €0 (No threshold)
- Requirement: Non-EU businesses must register for VAT and charge German VAT (usually 19%) on all sales to German consumers from the first sale.
2. France
- VAT Threshold for Non-EU Sellers: €0 (No threshold)
- Requirement: All non-EU sellers must register for VAT in France and apply French VAT (usually 20%) on sales to French consumers from the first sale.
3. Italy
- VAT Threshold for Non-EU Sellers: €0 (No threshold)
- Requirement: Non-EU businesses must register for VAT and charge Italian VAT (usually 22%) from the first sale to Italian consumers.
4. Spain
- VAT Threshold for Non-EU Sellers: €0 (No threshold)
- Requirement: Non-EU businesses are required to register for VAT in Spain and apply Spanish VAT (usually 21%) on all sales to Spanish consumers from the first sale.
5. Netherlands
- VAT Threshold for Non-EU Sellers: €0 (No threshold)
- Requirement: All sales to Dutch consumers require non-EU businesses to register for VAT in the Netherlands and charge Dutch VAT (usually 21%) from the first sale.
Canada
- GST/HST Threshold for Non-Canadian Sellers: CAD $30,000 (approximately USD $23,000) in a 12-month period.
- Requirement: Once this threshold is crossed, non-Canadian businesses must register for GST/HST, collect, and remit it on taxable sales to Canadian consumers. Rates vary by province, ranging from 5% to 15%.
Mexico
- VAT Threshold for Non-Mexican Sellers: No specific threshold; non-Mexican digital service providers are required to register for VAT regardless of sales volume.
- Requirement: For tangible goods, non-Mexican businesses need to register for VAT if they have a permanent establishment in Mexico or if Mexican authorities determine a need. The standard VAT rate is 16%. For digital services, the Mexican government requires all non-resident companies providing digital services to Mexican consumers to register and pay VAT.
Important Notes:
- Canada and Mexico: Both countries are focused on ensuring foreign businesses that meet specific sales criteria register for their respective VAT/GST regimes. The registration process can be straightforward but requires understanding local regulations and compliance.
