How do I know if I've reached Economic Nexus in a state?

TaxCloud tracks your business' activity and shows you in TaxCloud if you trigger an economic nexus within a state by highlighting in red with a “Tax

• Most states consider you have established nexus if you pass their sales threshold or transactions threshold during a 12-month period or the most recent calendar year. However, there are some states that require you pass both.
• You can view your progress from your Thresholds page in your TaxCloud account.
  • Please note that this is only as accurate as the transaction data you are providing to your account via CSV imports or your connected stores. It is important to periodically review this page and your transactions to ensure the numbers reflect what you expect to see.

States will show up in the ‘Requires Attention’ section as ‘Tax Exposed’ or 'Approaching Exposure' when a state license has not been applied to the state/tax collection has not been turned on. After applying a state license, the state will be removed from the Requires Attention section.

How to View State Tax Threshold Details

You can view detailed information about the economic nexus tax thresholds for a specific state directly from your dashboard.

Steps

1. Navigate to the main dashboard.
2. Scroll down to the "Thresholds" section, which lists all active locations.
3. Find the state you wish to examine in the list and click on its name.
4. You will be taken to the "Threshold Details" page for that state.
5. This page provides Threshold Info, which explains the specific economic nexus rules for the state, often based on the volume of transactions or total sales value.
6. It also displays your current progress towards meeting those thresholds.
7. Further down, you can review State Info and Tax Collection details, including the collection status and type.

Reviewing the Threshold Details page for each state is a crucial step in ensuring tax compliance. This feature gives you a clear and detailed view of your economic nexus obligations and collection status for each registered location.