How TaxCloud tracks nexus thresholds

TaxCloud monitors your sales activity against each US state's economic nexus rules every day. When your activity crosses (or approaches) a state's threshold rule, you see it in your account before any return is due.

For an explanation on how state threshold rules work, start with How thresholds work. This article picks up from there and covers how TaxCloud shows you your progress against those rules.

It explains how to read your threshold status: what the chips mean, what the progress bars show, when alert emails are sent, and what to do when you hit a threshold.

:::info Note: The Thresholds page tracks economic nexus only, based on sales volume and transaction/order count. Physical presence nexus (offices, warehouses, employees) is tracked separately under your Locations settings. :::

Where to find it

Open the TaxCloud app → Go → Thresholds, or go directly to app.taxcloud.com/go/thresholds. The All Locations tab lists every US state with active threshold rules but you can filter by toggling Show My States Only.

The Requires Attention tab filters the list to states where you are approaching or have reached the threshold.

Reading your status: the chips

Each state row shows a status chip that tells you, at a glance, where you stand.

Chip	Meaning	What to do
Under Threshold (blue)	Below 80% of the threshold. TaxCloud has active threshold data for this state.	Nothing
Under Threshold (gray)	Below 80% of the threshold. No threshold data available yet. For example, on states where orders haven't started flowing in.	Nothing
Approaching Threshold (yellow)	80–99% of the threshold in a completed measurement period.	Monitor. Consider preparing to register, if you haven’t already.
At Threshold (red)	100% or more of the threshold in a completed period. You are not yet collecting tax in this state.	Register and enable sales tax collection.
At Threshold (green)	100% or more of the threshold in a completed period. You are already collecting.	Nothing. Already handled.

:::info One important rule: a status chip reflects completed measurement periods only. If your current-year sales look high but the chip still shows Under Threshold, that is expected. The next section explains why. :::

Reading the progress bars

Progress bars appear in two places: on each state row on the main page, and in more detail when you click a state to open its Threshold Details page. Both use the same color rules.

Progress bars use color to show three things:

• whether the period is informational or authoritative
• where you sit against the threshold, and
• whether you are collecting

Bar fill	What it means	When you see it
Gray	Informational period. Shows where you're trending but does not affect your official status.	Current, in-progress period.
Blue	Authoritative bar, below 80% of the threshold.	A completed period, well under.
Orange	Authoritative bar, at 80–99% of the threshold. Visual equivalent of the yellow Approaching Threshold chip.	A completed period, approaching the limit.
Blue with red overflow	Over the threshold, not yet collecting. The blue portion covers the first 100%; the red overflow shows the amount past the limit.	A completed period where you need to enable sales tax collection.
Blue with green overflow	Over the threshold, already collecting.	A completed period where you are already handling the state.

:::info Why the gray progress bar matters

The gray bar shows your activity in the current, still-in-progress period. For most states, this is informational only and it doesn't affect your official status until the period closes.

If your gray bar is over 100% but the chip still says Under Threshold, check the state's rule at the top of the Threshold Details page. A few states count current-year activity too; the rule tells you which. :::

When the chip and the bars seem to disagree

For states that measure both sales volume and transaction/order count (see How thresholds work for a primer on state rules), you may see one bar under threshold (blue) and another over threshold (blue and red) on the same state row. The Threshold Status chip reflects the state's overall status based on that state's specific rule:

• Some states trigger the threshold if you cross either the sales limit or the order count limit. In that case, one bar going over is enough to flip the chip to At Threshold, even if the other bar is still under.
• Some states require you to cross both limits before the threshold is triggered. In that case, both bars need to be over before the chip changes.

The chip is always the authoritative signal for whether you have crossed the threshold in a state. The bars show you the underlying metrics.

Threshold alert emails

TaxCloud sends two email alerts as you approach and reach a state's threshold:

• 80% reached. Your activity has hit 80% of a state's threshold in a completed period. A good time to start preparing.
• 100% reached. You have met or exceeded the threshold. Register and enable collection in this state, if you haven't already.

If your activity passes both 80% and 100% between two daily updates, you'll get only the 100% alert.

You will not receive these alerts in the following cases:

• You are already collecting tax in that state. If your activity later crosses the threshold, the chip in the UI turns green to show "over threshold, already handled," but no email goes out.
• The threshold was crossed downward (for example, a new calendar year resets your prior-year total). Alerts are sent only on upward transitions.
• The same alert was already sent for the same state in the last 24 hours.

What to do when you hit a threshold

Tax collection does not turn on automatically when you cross an economic nexus threshold. You have to take this step.

1. Open the Threshold Details page for the state.
2. For non-SST states: apply a state license and set a collection start date. See Enable tax collection in a state.
3. For SST states: Email support@taxcloud.com to request collection activation. As a Certified Service Provider in the Streamlined Sales Tax Program, TaxCloud handles SST state registrations on your behalf.

:::info Tax collection does turn on automatically when you add a physical location in a state because that establishes physical nexus rather than economic nexus. :::

Things to keep in mind

• Data refreshes once a day at 1:00 AM CST: The numbers you see reflect the most recent daily calculation, not real-time activity. Today's orders show up in tomorrow's update.
• Test orders are excluded: Test orders are never counted toward threshold calculations.
• Accuracy depends on your data: If you import orders via CSV or use a store connection, periodically confirm the totals match your store records. Threshold status is only as accurate as the orders flowing into your account.

If something looks wrong

If a state shows a status you do not expect, check three things first:

1. Confirm all your sales channels are connected or being imported into TaxCloud.
2. Check whether you enabled collection in the state since the last daily refresh. The status will catch up at the next refresh.
3. Consider whether the gray bar is throwing you off. Only completed periods count toward your official status.

If none of these explain it, contact support@taxcloud.com with the state name and a screenshot of the Threshold Details page.