Economic nexus requirements continue to evolve. This year, Illinois and Kentucky eliminated their 200-transaction thresholds, shifting the focus to sales volume only. Here are a few things to consider:
Are you using the current nexus thresholds?
- Confirm your monitoring reflects recent state changes.
- Review whether states use sales revenue, transaction counts or both.
- Check which sales are included when calculating each state's threshold.
Are you measuring the right sales?
- Determine whether exempt and resale transactions count toward the threshold.
- Review how marketplace sales are treated.
- Confirm your sales data includes all applicable entities and sales channels.
Could your business activities create physical nexus?
- Review participation in conferences, trade shows and other business events.
- Consider whether organizing or hosting events, providing on-site services or having employees work in another state creates physical nexus.
- Determine whether these activities affect your existing sales tax registration.
California & Colorado Are Taxing More Digital Products — Here’s What You Need to Know
If your business sells or licenses software, SaaS, or digital products in CA or CO, big tax changes are coming 1/1/27. Both states are expanding taxability rules, tightening sourcing requirements, and introducing new reporting obligations — including California’s $5M digital-purchase rule that may shift use-tax responsibility to the buyer. These updates may impact your tax technology setup, exemption certificates, and nexus thresholds. Tax CSA can help you prepare so you enter 2027 fully confident in your compliance.
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