Economic nexus threshold changes for out-of-state sellers in Wyoming and Indiana
Understanding Economic Nexus
If you sell goods or services online to the United States, you've probably heard the term "economic nexus" in relation to sales tax. Economic nexus refers to the minimum connection a seller must have with a US state before the state can impose sales tax collection obligations.
In the past, only having a physical presence like a store established this connection, known as physical nexus. However, a major court case in 2018 (South Dakota v. Wayfair) changed the game. The Supreme Court ruled that a seller's online sales within a state could also create a connection, an "economic nexus." This means that even online businesses without a physical store can be responsible for sales tax collection if they reach a certain sales threshold in a state.
Each state sets its own economic nexus threshold, typically based on sales volume or transaction count. See our state-by-state economic nexus guide where we collected all the economic nexus thresholds.
Recent economic nexus threshold changes in Wyoming and Indiana
Both Wyoming and Indiana recently revised their economic nexus threshold in March 2024:
1. Wyoming: Previously, exceeding $100,000 in sales or having min. 200 transactions in the current or previous calendar year created economic nexus for out of state sellers.
Effective July 1, 2024, the 200-transaction threshold is eliminated, and only exceeding the $100,000 threshold creates economic nexus for out of state sellers. (see House Bill 197).
2. Indiana: Similar to Wyoming's prior approach, Indiana previously had a two-pronged threshold: exceeding $100,000 or having min. 200 transactions in the current or previous calendar year.
However, effective immediately and retroactive to January 1, 2024, Indiana has eliminated the 200-transaction threshold. Now, just like Wyoming, only surpassing the $100,000 sales threshold creates economic nexus for out of state sellers (see Senate Bill 228).
How Fonoa Can Help
If you have direct sales or facilitate sales to the United States as a marketplace, it is essential to keep track of sales and use tax rate changes and track whether you exceed nexus thresholds in the states where you have sales.
As a tax technology company, Fonoa can help businesses navigate the complex world of sales and use tax. Get in touch to discover how we can help you meet the challenges and take the complexity out of tax.
