Which states removed the 200-transaction nexus threshold?
The 200-transaction test originated with South Dakota’s 2018 economic nexus statute.
South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), upheld the South Dakota framework: $100,000 in sales or 200 separate transactions delivered into the state over the current or preceding calendar year, with either condition sufficient to establish economic nexus. [1]
Most states copied that template verbatim across the 2018-2019 adoption wave, and the $100K-or-200 phrasing became the default reference for what economic nexus looked like.
The default has since broken.
As of 2026, 14 states have moved to dollar-only triggers, and the trajectory continues. Washington (RCW 82.08.052) and Colorado (H.B. 19-1240) led in 2019; California’s framework was set as dollar-only at $500,000 via AB 147 as amended by SB 92 (Stats. 2019, ch. 34). [2][3][4]
North Dakota removed its transaction count retroactively, effective for taxable years after December 31, 2018, via SB 2191. [5]
Wisconsin followed on February 20, 2021, via 2021 Wis. Act 1. [6]
Maine (2022), Louisiana (2023), Indiana (2024), North Carolina (effective July 1, 2024, via H.B. 228 / Session Law 2024-28), and Wyoming (2024) closed the gap by year. [7][8][9][10][11]
Alaska’s Remote Seller Sales Tax Commission (ARSSTC) repealed its 200-transaction test effective January 1, 2025. Utah followed on July 1, 2025. [12]
Illinois removed its 200-transaction test effective January 1, 2026, via P.A. 104-0006. [14]
South Dakota, the Wayfair template’s origin state, also subsequently moved to dollar-only. [15]
The legislative pattern is consistent enough to call a cascade. State legislatures and revenue departments have acknowledged what the math implied from day one: a 200-transaction trigger captures revenue with no relationship to compliance burden, and a $40 sneaker brand selling $8,000 into a state was not the policy target. The states that have moved are uniformly the ones where high-volume DTC commerce concentrates.
Why the removal cascade matters most for high-volume, low-AOV ecommerce brands
High-volume, low-AOV ecommerce brands were often among the businesses most exposed to the 200-transaction test. The threshold counted transactions, not revenue, making average order value largely irrelevant.
A brand selling $40 socks and a brand selling $4,000 furniture crossed at the same place, 200 orders, but the second brand crossed at $800,000 of sales and the first crossed at $8,000. Two orders of magnitude separated the two outcomes on the same trigger.
The math is mechanical:
| Brand AOV | Transactions to hit 200 | Dollar volume at 200 transactions | % of $100,000 dollar threshold | Likely outcome under old OR rule |
|---|---|---|---|---|
| $20 | 200 | $4,000 | 4% | Trigger far below dollar threshold |
| $40 | 200 | $8,000 | 8% | Trigger far below dollar threshold |
| $75 | 200 | $15,000 | 15% | Trigger far below dollar threshold |
| $150 | 200 | $30,000 | 30% | Trigger well below dollar threshold |
| $300 | 200 | $60,000 | 60% | Trigger before dollar threshold |
| $500 | 200 | $100,000 | 100% | Triggers converge |
| $1,000 | 200 | $200,000 | 200% | Dollar threshold trips first |
A $40-AOV apparel brand on Shopify Plus selling into 35 states could quietly register in twenty or more states on transaction count years before any state’s dollar threshold became material. The reverse, a $300-AOV furniture brand, operated in those same states with no economic nexus exposure until sales actually reached $100,000. Two brands with the same revenue profile saw radically different registration footprints, and the difference was driven almost entirely by AOV.
Software for tracking sales tax nexus can do both dollar and transaction triggers tracking per state and surfaces the dollar-only states cleanly, so a brand re-running its footprint can see which historical registrations exist only because of the old transaction test. That visibility is the prerequisite to the deregistration decision, which sits in the next section.
The state-by-state removal list with dates and statutes
The full removal list as of 2026:
| State | Repealed / dollar-only effective | Current threshold | Statute / authority | Notes |
|---|---|---|---|---|
| Washington | 2019 | $100,000 (cumulative gross receipts, incl. facilitated and exempt sales) | RCW 82.08.052 [2] | Early adopter of dollar-only; explicit trailing-nexus rules in statute |
| Colorado | 2019 | $100,000 (retail sales) | H.B. 19-1240; Colo. Rev. Stat. §39-26-102(3)(b) [3] | Home-rule city filings remain separate; threshold is state-level only |
| California | 2019 (dollar-only from initial adoption) | $500,000 (TPP delivery, includes related persons under IRC §267(b)) | AB 147 (Stats. 2019, ch. 5) as amended by SB 92 (Stats. 2019, ch. 34); Cal. Rev. & Tax. Code §6203 [4] | $500K threshold with no transaction count from the start of CA’s Wayfair implementation |
| South Dakota | subsequent to 2018 | $100,000 (gross revenue) | SDCL §10-64 [15] | Origin state of the Wayfair template; subsequently moved to dollar-only |
| North Dakota | for taxable years after 12/31/2018 | $100,000 (taxable sales) | SB 2191 (2019); N.D.C.C. §57-39.2 [5] | Retroactive effective date; early removal |
| Wisconsin | February 20, 2021 | $100,000 (gross sales) | 2021 Wis. Act 1; Wis. Stat. §77.51(13gm) [6] | |
| Maine | 2022 | $100,000 (gross sales) | L.D. 1216 (2022); 36 M.R.S. §1754-B [7] | |
| Louisiana | 2023 | $100,000 (retail sales) | Act 425 (2023); La. R.S. §47:301(4)(m) [8] | Parish-level filings remain separate from state |
| Indiana | 2024 | $100,000 (gross sales) | SEA 228 (2024); Ind. Code §6-2.5-2-1(c) [9] | |
| North Carolina | July 1, 2024 | $100,000 (gross sales, incl. marketplace-facilitated) | H.B. 228 / Session Law 2024-28; N.C. Gen. Stat. §105-164.8(b); NC DOR Sales Tax Directive 24-1 [10] | |
| Wyoming | 2024 | $100,000 (gross sales) | Wyo. Stat. §39-15-501 [11] | |
| Alaska (ARSSTC) | January 1, 2025 | $100,000 (gross sales; ARSSTC local jurisdictions, no state tax) | ARSSTC Uniform Code, Aug 2024 update [12] | Alaska has no statewide sales tax; ARSSTC coordinates participating localities |
| Utah | July 1, 2025 | $100,000 (gross sales) | Utah Code §59-12-107 [13] | |
| Illinois | January 1, 2026 | $100,000 (gross receipts from sales of TPP) | P.A. 104-0006; 35 ILCS 185; IL DOR FY 2026-12 Informational Bulletin [14] | Quarterly determination; rolling 12-month measurement |
Two qualifications belong with the list:
- First, three states with dollar-only triggers as of 2026 use $500,000 rather than $100,000: California ($500,000 dollar-only), Texas ($500,000 dollar-only, never had a transaction test), and Tennessee ($100,000, lowered from $500,000 effective 10/1/2020). [16] Texas was always dollar-only; Tennessee separately reduced its dollar floor.
- Second, the table groups California with the removal cascade because the practical effect aligns. California’s adoption framework set the dollar-only structure at $500,000. The statutory record is that California codified dollar-only from the start of its Wayfair implementation rather than removing a previously enacted transaction count.
Re-running the nexus map after removal: deregister, stay, or recheck?
The re-run is not automatic. Removing the transaction test changes the go-forward trigger; it does not retroactively undo registrations a brand already made. A brand registered in Wisconsin in 2020 on transaction count, now sitting at $60,000 of annual Wisconsin sales, has the same active registration it had the day it filed. The trigger that put it there no longer exists in statute, but the registration does.
The decision framework breaks into three branches.
Branch 1: Registered, currently above dollar threshold
Branch 2: Registered, below dollar threshold, no physical presence
Branch 3: Registered on transaction, plus physical presence
For brands with multiple Branch 2 candidate states, the deregistration mechanics matter. Each state has its own process: some accept a closeout filing through the online portal, some require a written deregistration request, some require finalizing all returns through a defined termination date.
For example, some compliance providers, including TaxCloud, assist with deregistration in states where nexus no longer exists, helping manage trailing-nexus reviews, final filings, and state closeout requirements.
A practical note on Branch 2 brands that want to wait. Some operators want to keep registrations in place against the possibility of future growth back over the dollar threshold. That is a defensible posture, but it carries an annual filing obligation (most states require zero-return filings even when no tax is due) and a small recurring back-office cost. The choice is between deregistration with a clean restart later and continued nominal filings. Both are reasonable. The decision needs to be deliberate.
What’s still in motion: pending changes and the refresh cadence
The pending changes matter for planning. Legislatures keep moving on this, so the brand’s nexus map needs a refresh cadence that catches mid-year statutory changes, not an annual set-and-forget review.
Pending as of mid-2026:
- Kentucky. Legislative reporting indicates Kentucky’s 200-transaction threshold is scheduled for removal effective August 1, 2026. [18] As of this writing, the change is not yet reflected in Kentucky DOR’s published remote-seller guidance. [19] Brands operating in Kentucky should confirm against the DOR’s published bulletin closer to the effective date.
- Other states with introduced legislation. State legislatures continue to file bills removing the transaction count from existing OR-test statutes. NCSL and the Multistate Tax Commission track these in real time; the pattern of states moving has been one to three per year since 2021 and the cadence has not slowed. [20]
The 17 OR-test states still applying a 200-transaction trigger in 2026 are Arkansas, the District of Columbia, Georgia, Hawaii, Kentucky (scheduled for removal August 2026, pending final DOR confirmation), Maryland, Michigan, Minnesota, Nebraska, Nevada, New Jersey, Ohio, Puerto Rico, Rhode Island, Vermont, Virginia, and West Virginia. The two AND-test states, New York and Connecticut, continue to require both the dollar and transaction conditions to be met for nexus, which means a high-volume low-AOV brand can quietly clear 100 New York transactions (NY’s transaction count condition under §1101(b)(8), as originally codified by Part PP of A. 9508-C, 2019) or 200 Connecticut transactions (§12-407(a)(15)(A)(x)) without nexus, because the dollar condition is the binding constraint. [17][21]
Refresh cadence. Three changes inside the last calendar year alone (Utah on July 1, 2025; the Alaska ARSSTC on January 1, 2025; and Illinois on January 1, 2026) reshape the nexus math for any brand selling into those states. A finance team that runs a nexus map once a year in January catches Illinois but misses Utah and Alaska by months. The cadence that works at $20M to $80M ecommerce volume is:
- Monthly threshold tracking by state. Pulls actual sales into each state, compares against the active threshold, surfaces threshold crossings (and threshold drop-belows) in the month they occur.
- Quarterly statutory refresh. Re-reads each state’s economic nexus rule against the brand’s current footprint. Catches mid-year statutory changes that change the trigger structure, not just the sales math.
- Annual full audit of registration list against current nexus status. Branches 1, 2, and 3 from the previous section get worked through annually with documentation refresh.
What this means operationally for a $20M to $80M Shopify or Shopify Plus brand
A $20M to $80M Shopify Plus brand with a $40 to $75 AOV typically holds active registrations in 22 to 38 states, depending on physical footprint, channel mix, and growth trajectory. A meaningful share of those registrations, across the 14 states now operating on dollar-only triggers, were originally placed under the old 200-transaction test. The footprint and the threshold map no longer line up the way they did three years ago.
The work that follows is not one project. It is a refresh of three intersecting maps: the registration map (where the brand is registered), the threshold map (what each state currently requires), and the sales map (what the brand is actually doing in each state today). The brands that already run that refresh quarterly have a clean picture. The brands that have not refreshed since the original 2019 registration wave have ten to twelve candidate states where the dollar-only re-test may show no current nexus.
The Streamlined Sales Tax (SST) program shapes the filing side of the same picture. SST is a multistate compact among 24 participating states that consolidates filing into a single process when the brand works with one of the program’s Certified Service Providers, and ten of the 14 dollar-only-trigger states above (Washington, North Dakota, Wisconsin, Indiana, North Carolina, Wyoming, Utah, South Dakota, plus Alaska and Illinois in different roles) sit inside or adjacent to the SST roster. Filing in those states does not scale linearly with registration count when consolidated SST filing is in play.
The removal cascade itself is settled. The question is what the operating model looks like at $20M to $80M when the threshold map keeps moving and the registration map needs to follow. The operational requirements are clear: threshold monitoring that tracks dollar-only triggers per state in the month they take effect, a registration process that supports deregistration where the re-test no longer shows nexus, and consolidated filing across SST member states. Platforms like TaxCloud, as a Certified Service Provider under the SST program, consolidate these workflows into a single layer.