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 their tax laws.
Physical nexus: 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.
Economic 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. All jurisdiction specific tests and their respective units of measurement are monitored by Anrok for you. You can access a detailed summary of your nexus in each jurisdiction in Anrok.
To learn more, see How do I update my physical nexus?