You scale from one state to forty-eight almost by accident. Amazon spreads your inventory across a dozen fulfillment centers without asking. Shopify ships wherever a customer’s address says to ship. Somewhere in that growth, without a single decision on your part, your business may have crossed a line that gives several states the legal right to collect sales tax from you, whether you ever registered there or not.
Ignore that line long enough, and the bill does not stay small. A state can reach back three or four years, assess the tax you never collected out of your own margin, then add penalties of 5% to 25% and interest on top.
Get flagged for an audit, and the same exposure applies to every state you crossed a threshold in, not just the one that noticed first. None of this requires bad faith. Most sellers who end up here never decided to skip compliance; they just never mapped where their sales, inventory, and people actually created an obligation.
Keep reading to learn exactly which 2026 rules apply to Amazon FBA and Shopify sellers, what triggers an obligation in a state where you have never set foot, and what to actually do about each one. By the end, you will know whether your current setup is protecting your margin or quietly putting it at risk.
Nexus in Plain Terms: The Two Ways a State Can Reach You
Nexus is the legal connection between your business and a state that gives that state the authority to require you to collect and remit its sales tax. Two separate paths create that connection, and most growing sellers eventually trigger both.
Economic Nexus: Crossing a Sales Threshold With No Physical Presence
Economic nexus attaches when your sales into a state cross a dollar or transaction threshold, even if you have never shipped from that state or set foot in it. This standard exists because of a single Supreme Court case, and understanding its origin helps explain why the rules vary so much from state to state.
Physical Nexus: A Footprint, Even a Small One
Physical nexus attaches the moment you have something tangible in a state: an office, an employee, a contractor, or inventory sitting on a shelf. For Amazon sellers, this trigger is almost invisible, since Amazon decides where your units land, not you.
What to do about it: treat both nexus types as separate checklists you review on the same schedule, since a state can catch you on either one independently. Crossing neither is the only truly safe position.
Economic Nexus Thresholds in 2026, State by State
The economic nexus standard traces back to the 2018 Supreme Court decision in South Dakota v. Wayfair, Inc., which held that a state can require a remote seller to collect its sales tax without any physical presence, based on economic activity alone. South Dakota’s own law set the model: $100,000 in sales or 200 separate transactions in the current or prior year. Most states built their rules on that template, but 2026 is not 2018, and the details have shifted meaningfully since.
The $100,000 Standard, Now Usually Without the Transaction Count
Most states still use $100,000 in annual sales as the trigger, but a growing number of states have dropped the 200-transaction prong entirely, including Illinois, Utah, and Alaska’s local remote-seller regime. That matters most for sellers with a high volume of low-priced items, since 200 orders at $12 each used to trigger an obligation in states that counted transactions, even though the revenue barely cleared $2,000.
What to do about it: do not assume every $100,000 state also has a transaction count. Confirm each state’s current rule directly before registering, since this is the single fact most likely to be stale in any guide, including this one.
California and Texas: $500,000, Revenue Only
California and Texas both set their threshold at $500,000 in sales delivered into the state during the current or prior calendar year, with no transaction count. California’s rule, confirmed directly through the California Department of Tax and Fee Administration, counts gross sales of tangible personal property, including wholesale and marketplace sales, toward that figure, even on sales where Amazon already collected and remitted the tax on your behalf.
What to do about it: do not assume you are safe in these two states just because your unit prices are low. A seller doing meaningful volume in California or Texas can clear $500,000 faster than in smaller states, simply because the market is larger.
New York: The Dual Test That Actually Protects Most Small Sellers
New York requires both conditions to be met before nexus attaches: more than $500,000 in sales and more than 100 transactions into the state in the current or prior year. Cross only one of the two, and New York nexus has not attached yet.
What to do about it: if you sell high-ticket items in low volume, check whether you have actually cleared both New York thresholds before registering. Sellers sometimes register preemptively and take on filing obligations they don’t legally owe yet.
Higher-Tier States and the States With No Sales Tax at All
Alabama and Mississippi sit between the standard and the high-threshold states at $250,000, revenue only. On the other end, Delaware, Montana, New Hampshire, and Oregon have no statewide sales tax, so there is no economic nexus threshold to track there.
What to do about it: build your threshold list once, note which states use the standard $100,000 test, which use $250,000 or $500,000, and which have no sales tax, then review it quarterly rather than assuming last year’s map still holds.
Physical Nexus Triggers Unique to Amazon and Shopify Sellers
Economic nexus gets most of the attention, but physical nexus often triggers first for Amazon sellers, precisely because it requires no sales volume.
FBA Warehouse Inventory Creates Nexus the Moment It Lands
Storing inventory in a state has been treated as physical presence for decades, long before online selling existed, and Amazon’s fulfillment network makes this trigger almost impossible to track manually.
Amazon can split a single shipment across a dozen fulfillment centers within weeks of you sending it to just one, and each new state a pallet lands in can create nexus there from the first unit, regardless of how many you actually sell.
What to do about it: pull your Inventory Event Detail or FBA Inventory Ledger report from Seller Central periodically and map every state your stock has touched. That report is the closest thing to a real audit trail of your physical footprint.
Third-Party Fulfillment Centers and Prep Centers Count Too
A 3PL warehouse or prep center holding your inventory ahead of an FBA shipment creates the same physical nexus as an Amazon fulfillment center, even though you chose that location yourself. Sellers sometimes track Amazon-controlled warehouses but forget the prep center that touches inventory before it ever reaches Amazon.
What to do about it: include every location your inventory physically passes through in your nexus review, not just the fulfillment centers Amazon assigns after the fact.
Remote Employees and Contractors
Hiring a single remote employee or, in some states, even a contractor performing ongoing work can create nexus in their state, separate from anything tied to inventory or sales volume.
What to do about it: flag any new hire’s state the moment they are onboarded, and check that state’s physical nexus rules before assuming payroll setup is the only thing that changes.
What Multi-State Compliance Actually Requires
Knowing where you have nexus is only half the problem. What you do next determines whether that knowledge protects you or just documents the exposure.
Register Before You Collect, Not After
Collecting sales tax in a state before you hold a valid permit is illegal in most states and, in some, treated as holding funds you had no right to collect. The correct order is always the same: confirm nexus, register, then turn on collection with a start date that matches your permit.
What to do: never flip on tax collection in Shopify or elsewhere before the permit is issued, even if you already know you owe.
Marketplace Facilitator Laws Solve Collection, Not Registration
Amazon collects and remits sales tax on your marketplace orders in every state that requires it, under marketplace facilitator laws. That removes the collection burden from those specific sales, but it does not remove your registration and filing duty in states where you have crossed a threshold, and it does not touch your direct Shopify or wholesale sales at all.
What to do about it: confirm with each state whether marketplace-collected sales still need to be reported on your return, since many states require you to list them as exempt or already-taxed rather than leaving them off entirely.
Combined Multi-Channel Revenue Counts Toward Every Threshold
Most states measure your total sales into a state across every channel, not per platform. A seller doing $70,000 on Amazon and $45,000 on Shopify into the same state has $115,000 there, which clears the standard $100,000 threshold even though neither channel crossed it alone.
What to do about it: pull a combined sales-by-state report across every channel monthly, not just your best-performing one. Sellers running both platforms need one clean picture of reconciled revenue by channel to see this accurately, since a report built from Amazon data alone will always understate real exposure.
File Even When the Return Is Zero
Once registered, most states assign a monthly, quarterly, or annual filing frequency, and missing a filing, even one with nothing owed, can trigger a penalty on its own.
What to do about it: build a single compliance calendar covering every state’s due date and filing frequency rather than tracking each state separately in your head.
Where Sellers Get This Wrong Most Often
A few patterns show up repeatedly across sellers who discover nexus exposure only after a state notice arrives, rather than before.
Assuming Amazon “Handles Everything”
Marketplace facilitator collection covers the tax charged at checkout on Amazon orders. It says nothing about your registration duty, your Shopify sales, or the physical nexus your FBA inventory may have already created in states you never registered in.
Checking Nexus Once and Never Again
A holiday quarter or one viral product can push a seller past a threshold in eight weeks that took a year to approach previously. Annual review misses that; monthly review catches it.
Treating Every State the Same
A flat “$100,000 or 200 transactions” mental model breaks down the moment a seller does real volume in California, Texas, or New York, where the rules are materially different from the standard template.
Get Ahead of This Before a State Finds You First
Every part of this comes down to the same discipline: know where your sales and inventory have created an obligation, then register, collect, and file before a state tells you to. Sellers who review this quarterly turn nexus into a routine compliance task. Sellers who wait instead find out through a notice, a lookback period, and a penalty calculation.
If reading through these thresholds left you unsure whether your own FBA inventory or combined channel revenue has already crossed a line somewhere, that uncertainty is worth resolving before it becomes a state’s discovery instead of yours.
AMZ Accountant works exclusively with Amazon and Shopify sellers and can map your actual nexus footprint against these 2026 rules in a single conversation. Schedule a free strategy call and find out exactly where you stand before your next quarter closes.
Frequently Asked Questions
What is the 2026 economic nexus threshold for most states?
Most states still use $100,000 in annual sales as the trigger, though a growing number have dropped the 200-transaction option that used to apply alongside it. California, Texas, and New York use higher or different thresholds, so the standard figure does not apply everywhere.
Does storing inventory in an Amazon fulfillment center create sales tax nexus?
Yes, in most states. Physical presence, including inventory Amazon places in a fulfillment center on your behalf, has been treated as nexus for decades, and it can attach regardless of how many units you actually sell from that state.
Does Amazon collecting sales tax mean I do not need to register in a state?
Not necessarily. Amazon’s collection under marketplace facilitator laws covers tax on your marketplace orders, but many states still require you to register and file, especially once your inventory or combined sales create nexus there independently.
Do Shopify and Amazon sales count together toward a state’s threshold?
In most states, yes. Economic nexus thresholds are generally measured by your combined sales into a state across every channel, not per platform, so you typically add revenue from Amazon and Shopify to test against the threshold.
What happens if I already crossed a threshold and never registered?
States can generally assess uncollected tax for the past three to four years, plus penalties and interest, once they identify the exposure. A voluntary disclosure agreement, filed before the state contacts you, can often reduce penalties and shorten the lookback period.
How often should I check my nexus exposure?
Monthly, using a combined sales-by-state report across every channel you sell on. A single strong month or a new product launch can push a seller past a threshold far faster than an annual review would catch.