Economic Nexus
/ˌɛkəˈnɑːmɪk ˈnɛksəs/
Definitions
- (n.) A legal standard determining when a business has sufficient economic presence in a state to be subject to its tax laws, typically for sales tax purposes.
Many states apply economic nexus rules to require out-of-state sellers to collect sales tax once their sales exceed a certain threshold.
Forms
- economic nexus
Related terms
See also
Commentary
Economic nexus is a critical concept in state tax law following the Supreme Court's decision in South Dakota v. Wayfair, impacting remote sellers and their tax obligations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.