US Sales Tax for Online Business Owners: Nexus, Wayfair, and What You Actually Owe
Since Wayfair, US sales tax applies to online sellers based on economic activity in each state — even with no physical presence there. Here's how the rules work in 2026.
Last edited 7 May 2026 - Authors: Joe Martin Hanson, Director & Global Partner, with advice from FTR’s US State and Local Tax Partners.
Since the 2018 South Dakota v. Wayfair decision, you don't need a US office, warehouse, or employee to owe US sales tax. You just need $100K in sales to one state. Wayfair changed the rule for everyone, not just Americans.
Key Numbers to Know (2026)
States with economic nexus laws: ~45 (all states with sales tax)
Common economic nexus threshold: $100K in sales or 200 transactions/year (varies by state)
SaaS taxability: ~25 states tax SaaS, and the line moves by state
Marketplace facilitator laws: in nearly all states — Amazon, Etsy, and similar platforms collect on your behalf
Digital goods taxability: varies widely by state
Where You Owe, State by State
The threshold, not your physical footprint, is what triggers an obligation. This is the working map for the states that matter most to a typical online seller.
California
Economic nexus threshold: $500K annual sales
SaaS taxable?: Generally noTexas
Economic nexus threshold: $500K annual sales
SaaS taxable?: Grey area — verify per productNew York
Economic nexus threshold: $500K annual sales + 100 transactions
SaaS taxable?: YesWashington
Economic nexus threshold: Standard threshold (~$100K or 200 transactions)
SaaS taxable?: YesPennsylvania
Economic nexus threshold: Standard threshold (~$100K or 200 transactions)
SaaS taxable?: YesRemaining ~40 nexus states
Economic nexus threshold: ~$100K or 200 transactions (varies)
SaaS taxable?: Varies — about 25 states tax SaaS in totalAlaska, Delaware, Montana, New Hampshire, Oregon
Economic nexus threshold: No state sales tax
SaaS taxable?: Not applicable
The same SaaS product can be taxable in Pennsylvania, non-taxable in California, and genuinely unclear in Texas. Some states tax "downloaded software" but not "cloud-accessed software" — a distinction that decides real money.
What Changed After Wayfair
Physical presence used to be the test. Now nearly every state imposes collection obligations on sellers who cross its economic nexus threshold, full stop. Track sales by state, watch the thresholds, and register, collect, and remit wherever you cross one.
Non-US Sellers Are Not Exempt
Yes, this applies to you too. A SaaS company in Singapore selling to California and Texas can trigger obligations in both states without a single US employee. Most non-US sellers handle it one of three ways: a Merchant of Record platform like Paddle or LemonSqueezy that absorbs the tax entirely; automation tools like Stripe Tax or Anrok that register, collect, and remit across states; or ignoring it, which gets riskier every year as enforcement improves.
Registration and Filing
Cross a state's threshold and you generally have 30–90 days to register, then you collect at the correct rate and file returns — monthly, quarterly, or annual depending on volume. Miss it and back-tax plus penalties can be significant; some states are aggressive with out-of-state sellers specifically.
Marketplace Facilitator Rules
Sell through Amazon, Etsy, or eBay and the marketplace collects and remits sales tax for you in nearly all states. Your own website is a separate channel — it still triggers nexus on its own volume, independent of what the marketplace handles.
Choosing How to Comply
Selling through marketplaces only: you're mostly covered already — track your direct-channel volume separately. Selling direct with revenue concentrated in a handful of states: automation (Stripe Tax, Anrok, TaxJar) is cheaper than a Merchant of Record and keeps you in control of pricing. Selling direct across dozens of states or unsure where you stand today: a Merchant of Record trades margin for certainty, and at that point certainty is usually worth it.
Getting Registration Off Your Plate
Tracking economic nexus across 45 states by hand doesn't scale. On a scoping call, we walk through whether Stripe Tax, Anrok, or manual registration fits your footprint, and where you're already over a threshold without knowing it. Book one here.
General information only. This isn't tax or legal advice for your business — confirm your specific exposure with a qualified adviser before you file anything.
Next Steps
If you're evaluating offshore structuring and want an honest assessment of what CRS and UBO registries mean for your specific situation, book a scoping call. We don’t time-bill and the initial call is free - click the ‘Book a Consultation’ button or email us at hello@ftr.finance today.
Important note: This article is general information for readers considering cross-border retirement or asset structuring. It is not personal tax, legal, or financial advice. Tax laws, visa rules, and treaty positions change regularly, and how they apply to you depends on your specific facts, citizenship, source of income, and prior tax history. Speak to a qualified adviser at FTR or elsewhere before acting on anything in this article.
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