---
title: "What is Nexus?"
description: "Sales tax nexus occurs when your business has some kind of connection to a state."
canonical_url: "https://support.taxcloud.com/articles/what-is-nexus-nCx7rdvJOm"
md_url: "https://support.taxcloud.com/articles/what-is-nexus-nCx7rdvJOm.md"
---
# What is Nexus?

Sales tax nexus occurs when your business has some kind of connection to a state.

* All states have a slightly different definition of nexus, but most states consider that a “physical presence” or “economic connection” creates nexus. You only have to charge sales tax in the states in which you have a sales tax nexus.

## Business activities that create physical sales tax nexus include (Physical Nexus):

* Having an office, store, or other location in a state (even a home office)
* Having an employee, salesperson, contractor, etc. in a state
* Owning a warehouse or storage facility in a state
* Storing inventory in a state (I.e. A warehouse)
* Having a 3rd party affiliate in a state
* Temporarily doing physical business in a state for a limited amount of time, such as at a trade show or craft fair

## Economic nexus laws require that online sellers collect sales tax in that state if certain sales thresholds are met.

* For example, “If an online seller, even though they don’t have a physical presence in our state, makes more than $X in sales in our state, or conducts more than X number of transactions in our state, then they are required to collect sales tax from buyers in our state.”
* Each state's economic nexus law varies; Some may require a certain number of transactions *or* value in sales while others may require *both.*
* You can review all of the economic nexus laws [here](https://www.streamlinedsalestax.org/for-businesses/remote-seller-faqs/remote-seller-state-guidance).