Nexus is a tax term that means a “sufficient connection” with a state, city, or other taxing jurisdiction so as to allow that jurisdiction to subject your business to its tax laws.
- — Physical presence nexus means a seller has a physical presence in a jurisdiction sufficient for a state to impose a sales tax obligation. Sales tax nexus can be established by physical presence, meaning you have an office, a remote employee, inventory, or regular travel for work into that jurisdiction. See Overview of physical nexus.
- — Economic nexus means a seller is deriving enough revenue and economic benefit from customers in a jurisdiction so as to warrant the jurisdiction imposing a sales tax obligation. Although each test (and their unit of measurement for the threshold - e.g. gross sales or taxable sales) can vary by jurisdiction, a typical example is when a seller has $100,000 in gross sales or 200 individual invoiced transactions in a jurisdiction.
Anrok tracks your physical and economic nexus against each jurisdiction's threshold requirements. Anrok monitors all jurisdiction-specific tests and their respective units of measurement for you. You can access a detailed summary of your nexus in each jurisdiction in Anrok. See Monitor a jurisdiction's nexus status.