Yes. States have begun dropping the 200-transaction part of some economic-nexus tests, but the change is not nationwide. Kentucky is the clearest current example: Kentucky’s Department of Revenue says House Bill 757 removes the 200-or-more-sales-transaction registration standard for remote retailers and marketplace providers. A seller cannot assume that Kentucky’s approach applies elsewhere; several states still use a transaction count alongside a sales-dollar test, while others use a dollar-only test.
The former 200-transaction threshold meant that a remote seller could establish sales-tax economic nexus by reaching a specified number of sales delivered into a state, often as an alternative to reaching a specified dollar amount of in-state sales. Economic nexus is a state-by-state rule, and the sales counted, measurement period, treatment of marketplace sales, registration timing, and filing requirements can differ. If you sell through Amazon, Shopify, Etsy, Walmart, your own site, or a mix of channels, review each state separately.
For Kentucky sellers, the practical result is that transaction volume is no longer the independent registration trigger described in the prior rule; the applicable receipts standard and your other connections to Kentucky still need to be assessed. The exact position depends on your circumstances — confirm with the state, or talk to us and we will check it for you.
Key takeaways
- Kentucky has removed its 200-sales-transaction economic-nexus registration standard for remote retailers and marketplace providers.
- A transaction-threshold change in one state does not change the rules in every other state.
- New York still uses a combined receipts-and-transaction test for qualifying remote sellers.
- Marketplace collection does not automatically resolve your own registration or filing duties.
- After nexus is established, registration, collection, filing, remittance, and recordkeeping must be addressed together.
What is the 200-transaction threshold for economic nexus?
The 200-transaction threshold is a sales-count test used by some states to decide when an out-of-state business has enough economic activity to have sales-tax nexus. A transaction generally means a sale delivered into that state, but the legal definition matters. A state may count taxable and exempt sales, and its rules may address marketplace-facilitated sales differently from direct sales.
In the familiar version of the rule, a seller had nexus after either reaching a stated dollar amount of sales into the state or completing 200 separate in-state transactions during the relevant measuring period. That structure could capture a seller with many low-value orders even where its total revenue was modest. It was especially relevant to Etsy, Shopify, and other sellers with high order counts and lower average order values.
Not every state used 200 transactions, and not every state treated the sales-count test as an alternative. New York, for example, tells remote sellers to register when both conditions are met in the immediately preceding four sales-tax quarters: more than $500,000 of gross receipts from sales of tangible personal property delivered into New York and more than 100 sales transactions. That is an “and” test, not an “either/or” test.
Have states dropped the 200-transaction sales-tax threshold?
Yes, but selectively. Kentucky’s Department of Revenue states that House Bill 757 removed the economic-nexus standard of 200 or more sales transactions as a registration requirement for remote retailers and marketplace providers. Kentucky sellers should therefore not continue relying on a transaction-count screen when determining whether a Kentucky registration obligation exists.
This does not mean that every state has dropped transaction thresholds or that a seller can use one national nexus rule. Some states continue to use a count-and-dollar test. Others use a dollar-only rule. Some may use a sales count and dollar amount together rather than as alternatives. Physical presence can also create nexus regardless of a remote-seller threshold.
For a closer Kentucky-specific discussion, see Did kentucky eliminate its 200-transaction nexus threshold and Could kentucky’s sales-tax threshold now be lower than expected. The key operational point is that a threshold change affects monitoring, not merely tax collection: a business must reassess whether it should register, collect, file returns, and remit tax.
Which states removed transaction thresholds in 2026?
Based on the Kentucky Department of Revenue material available for this review, Kentucky is one confirmed state that removed its 200-sales-transaction economic-nexus registration standard effective August 1, 2026. The Department’s Streamlined Sales and Use Tax Agreement recertification identifies the change for remote retailers and marketplace providers.
We would not treat an article, a marketplace message, or a generalized tax chart as enough to conclude that another state made the same change. Sales-tax rules change at the state level, and an apparently small wording difference can affect whether a threshold is based on retail sales, gross receipts, taxable sales, direct sales, marketplace sales, or all sales delivered into the state.
If you have sales in multiple states, use a current state-by-state review rather than copying Kentucky’s result across your footprint. Our List of states with economic nexus is a useful starting point, but registration decisions should be confirmed against the applicable state authority and your actual sales channels.
How economic nexus thresholds work by state
Economic nexus is a connection created by your sales activity in a state, even if you do not have a store, office, or employee there. States set their own threshold tests. The test commonly looks at sales delivered to customers in the state over a defined period, but the rule may be based on dollars, transaction count, both, or another formulation.
New York illustrates why the details matter. The New York State Department of Taxation and Finance says a business with no physical presence meets its remote-seller registration test when, during the immediately preceding four sales-tax quarters, it has more than $500,000 in gross receipts from sales of tangible personal property delivered into the state and more than 100 such sales transactions. New York also explains that the receipts and transactions can include taxable and exempt sales, including sales for resale.
Do not assume that sales made through a marketplace disappear from nexus analysis just because the marketplace collects tax from the buyer. Marketplace rules can change what the marketplace must collect, but they do not automatically answer whether your own business must register or file. See Does a marketplace collecting tax mean I do not have to register? for the practical distinction.
Which states never used a transaction threshold?
Many states structure remote-seller nexus around sales dollars rather than a transaction count, but a reliable current list requires verification against each state’s own tax authority. It is not safe to label a state as one that “never” used a transaction threshold without confirming its statutory and administrative history.
For compliance purposes, the more useful question is what the state requires now. A dollar-only state can still create nexus quickly for a business with a small number of high-value orders. Conversely, a state using a transaction count can affect a business with frequent low-value orders. The right monitoring method tracks both dollars and order counts unless the applicable state rule clearly makes one irrelevant.
Also remember that economic nexus is not the only nexus route. Inventory stored in a state, employees, contractors, offices, trade-show activity, or other in-state connections can require a different analysis. Marketplace fulfillment arrangements deserve particular attention because inventory location can matter independently of remote-sales thresholds.
Why are states getting rid of transaction thresholds?
A transaction-count threshold can create a compliance burden that is disproportionate to revenue, particularly for businesses with many small orders. Removing the count test lets a state focus its remote-seller analysis on sales value rather than the number of individual orders. Kentucky’s change shows that a state can remove the 200-transaction registration standard while retaining a separate receipts-based analysis.
That may simplify one part of tracking: sellers may no longer need to maintain a separate order-count trigger for that state. It does not simplify sales-tax compliance as a whole. You still need accurate destination data, product taxability decisions, marketplace-versus-direct sales separation, exemption documentation where relevant, registration analysis, return preparation, and payment controls.
For cross-border sellers, product scope is another reason not to reduce compliance to one nexus metric. States are also examining the tax treatment of digital products, digital content, and cloud-related services. See Are more states taxing digital content and cloud services now if your catalog includes non-physical products or services.
What should a seller do when it exceeds a nexus threshold?
First, identify exactly which threshold was exceeded, the period used by that state, and whether the relevant sales were direct, marketplace-facilitated, taxable, exempt, or some combination. Preserve reports that support the calculation. A tax authority may use terms such as gross receipts, retail sales, taxable sales, or sales delivered into the state, and those terms are not interchangeable.
Second, determine whether you have another nexus connection that changes the outcome. A seller may have registration obligations before a remote-sales threshold is met if it has physical presence or another recognized connection. If the threshold has been exceeded, do not simply turn on collection without checking whether registration must happen first and whether the state specifies a collection start point.
Third, register when required, configure collection correctly by destination, and establish a filing calendar. A registration does not end the work: it is the beginning of collecting, filing returns, remitting tax, maintaining records, and handling zero returns if the state assigns a filing period with no tax due. For help understanding return frequency, see How often do I have to file a sales tax return?.
When should you register, and what filing and remittance obligations follow?
A business should register when state law requires it to register. That can be because it exceeds an economic-nexus threshold, has physical presence, operates as a marketplace provider, or has another taxable connection. Do not register merely because you made one sale into a state unless the state’s rules make registration appropriate; equally, do not wait for a transaction count if the state uses a dollar-only test or a physical-presence rule applies.
New York provides a specific example of why prompt action matters. Its Department of Taxation and Finance says a remote seller that meets New York’s applicable receipts-and-transaction test should register and begin to collect and remit tax; the Department specifies a registration filing deadline and a collection start point after the threshold is met. Other states can use different timing rules, so follow the state where nexus arose.
After registration, the state assigns filing and payment obligations. These may include periodic sales-tax returns, remittance of tax collected, record retention, and reconciliation of direct and marketplace sales. Filing obligations can continue even in periods with no taxable sales, depending on the state and account status. Review notices from the tax authority and do not ignore a return simply because a marketplace handled collection for some orders.
Not sure how this applies to your business? We handle US sales tax registration, filing and remittance for ecommerce sellers as a fully managed service, for one fee. Book a free consultation and we will review your own position with you.
What happens if you start collecting late?
Collecting late does not necessarily erase an earlier registration or tax obligation. If a state concludes that you should have registered and collected earlier, it may assess tax, interest, and penalties under its rules. Whether tax can be recovered from past customers is a commercial and legal question; many sellers end up treating uncollected tax as their own cost rather than trying to revisit completed orders.
Late collection can also create data problems. Your books may show marketplace-collected tax, direct-site tax, exempt sales, refunds, and shipping charges differently. Before filing, reconcile the return data to the state’s filing instructions and retain order-level support. Do not remit tax that a marketplace already remitted as the deemed collector without first confirming the state’s reporting treatment.
If you identify a historical exposure, act before assuming that turning collection on today solves the past. The exact position depends on your circumstances — confirm with the state, or talk to us and we will check it for you.
Current examples of how state economic-nexus tests can be structured
| State | Current threshold structure discussed by the state | How the transaction count operates | Seller action point |
|---|---|---|---|
| Kentucky | Kentucky’s Department of Revenue materials identify a receipts-based remote-seller analysis after removal of the 200-sales-transaction registration standard. | The 200-or-more-sales-transaction standard has been removed for remote retailers and marketplace providers. | Review Kentucky receipts and all other nexus connections; do not rely on an order-count trigger. |
| New York | More than $500,000 in gross receipts from sales of tangible personal property delivered into New York and more than 100 sales transactions in the immediately preceding four sales-tax quarters. | It is a combined test: both the dollar amount and more than 100 transactions must be met. | Measure both receipts and transactions over the stated four-quarter lookback and register when both requirements are met. |
| Other states | The structure varies by state and may be dollar-only, transaction-only, combined, or dependent on other nexus facts. | A count may be an alternative trigger, a condition that must also be met, or not part of the current rule. | Verify the current rule with the state tax authority before deciding not to register. |
Frequently asked questions
What is the 200-transaction threshold for economic nexus?
It is a sales-count measure that some states have used to determine whether a remote seller has enough in-state activity to be required to register, collect, and remit sales tax. In a common structure, completing 200 sales delivered into the state could trigger nexus even if the seller did not meet a separate dollar-sales threshold. The exact definition of a transaction and the measurement period are state-specific.
Have any states dropped the 200-transaction sales-tax threshold?
Yes. Kentucky’s Department of Revenue states that Kentucky removed the economic-nexus standard of 200 or more sales transactions as a registration requirement for remote retailers and marketplace providers. That does not mean transaction thresholds have disappeared nationwide.
Which states eliminated the transaction threshold in 2026?
Kentucky is the state confirmed by the Kentucky Department of Revenue material reviewed here as removing its 200-sales-transaction economic-nexus registration standard in 2026. Do not assume another state made the same change without checking that state’s current tax authority guidance.
Why are states getting rid of the transaction threshold?
A transaction count can pull in sellers with numerous small orders while creating another metric to monitor. A state that removes the count test may focus its remote-seller analysis on receipts instead. The change can reduce one tracking task, but it does not eliminate the need to monitor sales tax state by state.
Do states still use both dollar and transaction thresholds?
Yes. New York currently uses both: the New York State Department of Taxation and Finance says a remote seller must exceed its stated receipts amount and make more than 100 qualifying sales transactions in the prior four sales-tax quarters. Other states may use a different combination or a dollar-only approach.
What should a seller do when it exceeds a nexus threshold?
Confirm the threshold calculation under that state’s definitions, check for physical or other nexus, and determine the registration and collection timing. Then register when required, set up accurate tax collection, and prepare to file and remit on the schedule assigned by the state. Keep documentation supporting the calculation and your channel-level sales data.
When does a business need to register for sales tax?
A business needs to register when it has a registration obligation under the relevant state’s rules. Economic nexus is one route, but physical presence, inventory, employees, representatives, and marketplace-provider status can also matter. The exact position depends on your circumstances — confirm with the state, or talk to us and we will check it for you.
Does removing the transaction threshold simplify sales-tax compliance?
It can simplify threshold monitoring in that state because there is one less metric to track. It does not remove the need to analyze product taxability, marketplace treatment, destination sourcing, registration, returns, remittances, and recordkeeping. Multi-state sellers still need a state-by-state process.
Official sources
- https://revenue.ky.gov/Business/Sales-Use-Tax/Documents/KY%20SSUTA%20Recertification%20-%207-29-26.pdf
- https://revenue.ky.gov/Business/Sales-Use-Tax/pages/default.aspx
- https://www.tax.ny.gov/pubs_and_bulls/publications/sales/nexus.htm
- https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/do_i_need_to_register_for_sales_tax.htm
Related reading
- Did kentucky eliminate its 200-transaction nexus threshold
- Are more states taxing digital content and cloud services now
- Could kentucky’s sales-tax threshold now be lower than expected
- Does a marketplace collecting tax mean I do not have to register?
- Our sales tax compliance services
Getting this handled
If you would rather not work this out yourself, that is what we do. We register you, file your returns and keep you compliant across every state where you have an obligation — one point of contact, one invoice. Talk to us about your situation.
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This article is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.