Economic Nexus Changes in 2026: Which States Changed Thresholds
The sales tax landscape continues to evolve. Since the landmark 2018 Wayfair decision, states have steadily refined their economic nexus rules. In 2025 and 2026, several states made significant changes that could affect your registration requirements.
This guide covers the latest threshold changes and what they mean for online sellers.
Tax Compliance
The Big Trend: Eliminating Transaction Thresholds
What's Changing
The most significant trend in 2025-2026 is states eliminating their 200-transaction threshold, moving to revenue-only nexus triggers.
| Before | After |
|---|---|
| $100,000 in sales OR 200 transactions | $100,000 in sales only |
Why This Matters
Transaction thresholds disproportionately affect small businesses:
- A seller with 250 transactions totaling $50,000 would have nexus under old rules
- Under new rules, they wouldn't—only revenue counts
- This simplifies compliance for small, high-volume sellers
States Making the Change
As of early 2026, 15+ states have eliminated transaction thresholds:
| State | Effective Date | New Threshold |
|---|---|---|
| Illinois | January 1, 2026 | $100,000 sales only |
| Utah | July 1, 2025 | $100,000 sales only |
| Alaska | January 1, 2025 | $100,000 sales only |
| Many others | Various | Revenue-only |
State-by-State Changes
Illinois: Major 2026 Update
Effective January 1, 2026
| Before | After |
|---|---|
| $100,000 OR 200 transactions | $100,000 sales only |
Impact:
- Businesses below $100,000 in Illinois sales may be able to deregister
- No more counting transactions
- Simpler compliance monitoring
Who benefits:
- High-volume, low-dollar sellers (e.g., selling many small items)
- Businesses just over the old transaction threshold
- Small businesses with many orders under $500
Utah: Mid-2025 Change
Effective July 1, 2025
Utah removed its transaction threshold to reduce compliance stress for smaller merchants.
| Before | After |
|---|---|
| $100,000 OR 200 transactions | $100,000 sales only |
Alaska: 2025 Update
Effective January 1, 2025
Alaska removed the transaction count from its economic nexus requirements, joining the revenue-only trend.
Other States Still Using Transaction Thresholds
As of 2026, approximately 18 states still use transaction thresholds. These include various combinations:
| Threshold Type | States |
|---|---|
| $100K OR 200 transactions | Various states |
| Higher thresholds | Some states |
| Lower thresholds | A few states |
Check your specific states—rules vary significantly.
What This Means for Your Business
If You're Near the Threshold
Previously registered based on transactions:
If you registered in a state solely because you exceeded 200 transactions (but not $100,000), you may now be able to:
- Cease collecting sales tax
- Potentially deregister
But consider:
- Trailing nexus rules (some states require continued collection)
- Future sales growth
- Audit implications of deregistering
If You're a Small Seller
The shift to revenue-only thresholds is generally positive:
| Benefit | Description |
|---|---|
| Fewer registrations | Transaction threshold no longer triggers nexus |
| Simpler tracking | Only monitor revenue, not transaction counts |
| Lower compliance costs | Fewer states to register in |
If You're a High-Volume Seller
For sellers with many small transactions:
Example:
- 5,000 transactions annually
- Average order: $15
- Total revenue: $75,000
Under old rules: May have nexus in many states (exceeding 200 transactions) Under new rules: Only nexus where revenue exceeds threshold
How to Respond to These Changes
Step 1: Review Your Current Registrations
| State | Your Sales | Your Transactions | Still Have Nexus? |
|---|---|---|---|
| Example A | $120,000 | 150 | Yes (over revenue threshold) |
| Example B | $80,000 | 400 | Check—may depend on state rules |
| Example C | $40,000 | 250 | Likely no longer have nexus |
Step 2: Analyze Each State
For each state where you're registered:
- What triggered your registration?
- Has that state changed its threshold?
- Do you still meet the new threshold?
- What are the deregistration implications?
Step 3: Consult Before Deregistering
Important: Don't automatically deregister. Consider:
- Trailing nexus - Some states require continued collection for a period
- Future sales - Will you exceed threshold soon?
- Audit risk - Deregistering may trigger review
- Administrative burden - Is it worth the hassle?
A tax professional can help analyze your specific situation.
The Current Threshold Landscape
Revenue-Only States (Growing List)
These states use only a revenue threshold:
| State | Threshold |
|---|---|
| California | $500,000 |
| Texas | $500,000 |
| New York | $500,000 |
| Florida | $100,000 |
| Illinois (2026) | $100,000 |
| Utah (2025) | $100,000 |
| And others | Varies |
States Still Using Transaction Thresholds
Some states still use either/or thresholds:
| Threshold | How It Works |
|---|---|
| $100,000 OR 200 transactions | Meet either to have nexus |
Check each state's current rules—they change frequently.
No Sales Tax States
Remember, five states have no general sales tax:
- Alaska (local taxes may apply)
- Delaware
- Montana
- New Hampshire
- Oregon
Tracking Your Nexus Exposure
Simple Tracking System
Create a spreadsheet to monitor:
| State | Current Sales | Transaction Count | Threshold | Status |
|---|---|---|---|---|
| TX | $450,000 | 2,000 | $500K | Approaching |
| FL | $95,000 | 800 | $100K | Monitor closely |
| IL | $75,000 | 300 | $100K (2026) | Below—may deregister |
When to Register
Register proactively when you're approaching the threshold:
- Within $10-20K of revenue threshold
- Gives time to set up collection
- Avoids playing catch-up
Using Software
Tax automation tools can track your nexus exposure:
| Feature | Benefit |
|---|---|
| Real-time tracking | Know when you're approaching thresholds |
| Alerts | Get notified before you hit limits |
| Multi-state monitoring | Track all states simultaneously |
| Filing assistance | Streamline returns |
Common Questions About Threshold Changes
"Can I deregister now that my state removed the transaction threshold?"
Possibly, but consult a tax professional first. Consider trailing nexus rules and audit implications.
"Do I need to register retroactively if I just hit the threshold?"
When you exceed a threshold, you generally need to register going forward. States don't usually require retroactive collection, but you should register promptly.
"What if I'm slightly over the threshold one year but under the next?"
Most states look at a rolling 12-month period or prior calendar year. If you drop below threshold, you may be able to cease collection—but check trailing nexus rules.
"Do marketplace sales count toward my threshold?"
Yes—in most states, your total sales INTO the state count, including marketplace sales where the marketplace collects tax. This affects when you need to register.
"Should I proactively deregister from states where I no longer have nexus?"
Consider the administrative burden vs. benefits. If you're close to threshold or growing, staying registered may be simpler. If you're well below and likely to stay there, deregistering might make sense.
Other 2025-2026 Sales Tax Changes
Rate Changes
Several states adjusted sales tax rates:
- DC: Increasing from 6% to 7% (October 2026)
- Various local rate changes nationwide
Exemption Changes
Watch for changes to:
- Food and grocery exemptions
- Manufacturing exemptions
- Research and development exemptions (Texas ending R&D exemption January 2026)
New Taxes
Some jurisdictions are adding:
- Retail delivery fees (Colorado model spreading)
- Digital advertising taxes (under consideration)
- Service taxes (expanding in some states)
Key Takeaways
- Transaction thresholds are disappearing - Revenue-only is the trend
- This helps small sellers - Fewer registration requirements
- Illinois changed January 2026 - Major market update
- Don't auto-deregister - Consider all implications
- Keep monitoring - Rules change frequently
Action Items for Sellers
Immediate
- ☐ Review your current state registrations
- ☐ Identify states where you registered based on transactions alone
- ☐ Check if those states changed their thresholds
- ☐ Consult with a tax professional if considering deregistration
Ongoing
- ☐ Monitor sales by state monthly
- ☐ Set alerts for approaching thresholds
- ☐ Stay updated on state changes
- ☐ File all required returns on time
Stay Compliant in a Changing Landscape
Economic nexus rules keep evolving. Make sure your business foundation is solid with proper registration and documentation.
Apply for Your Resale Certificate →
Need help understanding your nexus obligations? Contact us for guidance.