What is click through nexus?
We’ve been looking at click-through nexus and its impact on small business owners nationwide. Essentially, it’s another challenge facing eCommerce sellers as states look to increase revenue. Unlike physical nexus, click-through nexus taxes businesses with affiliate relationships in different states.
However, not all states enforce click-through nexus tax requirements. Similar to sales tax, there is no federal mandate on click-through nexus. State court decisions determine whether sellers are liable for sales tax based on click-through activity. Illinois recently declined to implement click-through nexus, with its Supreme Court citing unfairness to Internet retailers.
To help small business owners navigate these complexities, we’ve compiled a list of states that currently tax sellers under click-through nexus rules. Hopefully, this list will help you run your business more smoothly in the future.
States That Have Enacted Click-Thru Nexus ProvisionsBelow are the states that have implemented click-through nexus provisions. Each state’s threshold for affiliate or marketing program sales is specified. You only need to comply with sales tax requirements on click-through nexus once you exceed this threshold, unless you have other nexus in the state. For instance, if the threshold is $10,000, you must reach $10,000 in sales in that state for nexus to apply.
Please note that these laws frequently change, so it’s advisable to consult with your accountant if you have any questions.
Additionally, the list indicates whether the provision is rebuttable (can be disproven with evidence) or irrebuttable (cannot be disproven regardless of evidence).
- Arkansas
Threshold: More than $10,000 during the preceding 12 months.
Arkansas has a rebuttable presumption.
- California
Threshold: More than $10,000 and more than $1 million in annual in-state sales.
California has a rebuttable presumption.
- Connecticut
Threshold: More than $2,000 during the preceding four quarterly periods.
Connecticut has an irrebuttable presumption.
- Georgia
Threshold: More than $50,000 in the preceding 12 months.
Georgia has a rebuttable presumption.
- Idaho
Threshold: More than $10,000 in the preceding 12 months.
Idaho has rebuttable presumption.
- Kansas
(Kansas will no longer have click-through nexus after June 30, 2021)
Threshold: More than $10,000 during the preceding 12 months.
Kansas has a rebuttable presumption.
- Louisiana
(Goes into affect April 1, 2016)
Threshold: More than $50,000 during the preceding twelve months.
Louisiana has rebuttable presumption.
- Maine
Threshold: More than $10,000 during the preceding year.
Maine has a rebuttable presumption.
- Michigan
Threshold: More than $10,000 during the immediately preceding 12 months.
Michigan has rebuttable presumption.
- Minnesota
Threshold: More than $10,000 in the 12-month period ending on the last day of the most recent calendar quarter before the calendar quarter.
Minnesota has a rebuttable presumption.
- Missouri
Threshold: More than $10,000 in the preceding 12 months.
Missouri has a rebuttable presumption.
- Nevada
Threshold: More than $10,000 in the preceding quarterly four periods.
Nevada has rebuttable presumption.
- New Jersey
Threshold: More than $10,000 in the prior four quarterly periods.
New Jersey has rebuttable presumption.
- New York
Threshold: More than $10,000.
New York has a rebuttable presumption.
- North Carolina
Threshold: More than $10,000 during the preceding four quarterly periods.
North Carolina has a rebuttable presumption.
- Ohio
Threshold: More than $10,000 during the preceding calendar year.
Ohio has rebuttable presumption.
- Pennsylvania
Threshold: There is no threshold specified, so assume you owe sales tax if you have click-thru nexus.
Pennsylvania has no presumption on the books.
- Rhode Island
Threshold: More than $5,000 during the four preceding quarterly periods.
Rhode Island has a rebuttable presumption.
- Tennessee
Threshold: More than $10,000 during the preceding 12 months.
Tennessee has a rebuttable presumption.
- Vermont
(Begins December 1, 2015)
Threshold: More than $10,000 in the preceding tax year.
Vermont has a rebuttable presumption.
- Washington
Threshold: More than $10,000 in the preceding tax year.
Washington has rebuttable presumption.
As evident, state laws vary significantly, necessitating diligent record-keeping. Furthermore, in some states, you may not have the opportunity to demonstrate that you lack nexus and thus are not liable for sales tax.
For further insights, explore the Startxpress Help Center and Blog. If you have questions or need support, reach out anytime at support@startxpress.io!
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