What is Sales Tax Nexus Anyway?

Your business owes sales tax in any state where it has “sales tax nexus”. In short, if you have sales tax nexus you need to collect and remit sales tax. If you don’t have sales tax nexus, you generally don’t need to get a permit. 

Sales tax nexus is a legal term that means you have crossed a threshold and now have a sales tax collection responsibility in the state. Nexus can be created by having a physical presence, economic presence, or by other factors.  Nexus rules vary by state and retailers have specific nexus rules based on where they have people, property or inventory.  

What Should You Do Once You Determine You Have Sales Tax Nexus?

Once you determine that you have sales tax nexus in Nevada, your next step is to register for a sales tax permit in the state.  Check out our blog post on getting a Sales Tax permit in Nevada for more information about that process.  If you are not interested in doing the work of getting the permit yourself, TaxValet can handle the permit registration for you with our Sales Tax Permit Registration Service.

Common Ways to Have Sales Tax Nexus in Nevada

1. Economic nexus in Nevada

If you had $100,000 or more retail sales or had 200 or more separate transactions in Nevada in the previous or current calendar year, then you are required to register for, collect, and pay sales tax to the state. If you meet this threshold, it does not matter if you have a physical presence in Nevada.  Nexus has been created based on your volume of sales.

For more information, please see the State of Nevada Department of Taxation.

If you need help determining which states you have crossed economic nexus thresholds, check out our Sales Tax Starter Kit service.

2. Physical presence nexus in Nevada

Retailers maintaining a place of business in this state are required to collect sales tax. However, Nevada does not define the term “retailer maintaining a place of business.” If you have any of the following, you could be considered a “retailer maintaining a place of business”:

1. An office or place of business
2. An employee present in the state
3. Goods in a warehouse
4. Ownership of real or personal property
5. Delivery of merchandise in Nevada in vehicles
6. Independent contractors or other representatives in Nevada

For more information, see NRS 372.020.

If you need help determining which states you have a physical presence in, check out our Sales Tax Starter Kit service.

Uncommon Ways to Have Sales Tax Nexus in Nevada

1. Affiliate Nexus in Nevada

What exactly is affiliate nexus? Affiliate nexus can exist when a business has sufficient contact with a state through a separate business. If your out-of-state business has a relationship with an in-state business, then you may have affiliate nexus. 

Please keep in mind that an “affiliated business” does not necessarily mean that it is a marketing “affiliate” in the typical sense of the word. Instead, “affiliate nexus” refers to the relationship between two businesses.

You may have affiliate nexus if your business has ties to a business in Nevada that engages in any of the following:

1. Sells a similar line of products or services as the retailer and does so under a business name that is the same or similar to that of the retailer;
2. Maintains an office, distribution facility, warehouse or storage place or similar place of business in the state to facilitate the delivery of tangible personal property sold by the retailer to the retailer’s customers;
3. Uses trademarks, service marks or trade names in the state that are the same or substantially similar to those used by the retailer;
4. Delivers, installs, assembles or performs maintenance services for the retailer’s customers within the state;
5. Facilitates the retailer’s delivery of tangible personal property to customers in the state by allowing the retailer’s customers to pick up tangible personal property sold by the retailer at an office, distribution facility, warehouse, storage place or similar place of business maintained by the component member in the state; or
6. Conducts any other activities in the state that are significantly associated with the retailer’s ability to establish and maintain a market in the state for the retailer’s products or services.

For more information about affiliate nexus in Nevada, see Nevada Statute 372.7243.

2. Click-through Nexus in Nevada

What is click-through nexus? Referrals from in-state entities may trigger nexus for an out-of-state company. Click-through nexus may be established in Nevada if all of the following conditions are met: 

1. Enter into an agreement with a resident for commission or other consideration based upon the sale of tangible personal property; and
2. The resident representative directly or indirectly solicits business from Nevada customers to the retailer, whether by link on an Internet website or otherwise; and
3. The out of state retailer’s gross receipts over 12-months (preceding four quarterly periods) is at least $10,000.

For more information about click-through nexus in Nevada, see Nevada Statute 372.7247.

Do You Need a Sales Tax Permit in Nevada If You Only Sell on Marketplaces?

If you ONLY make sales through an approved marketplace (Amazon, eBay, etc), the marketplace is responsible for collecting and remitting the sales tax on your behalf. You do not need a sales tax permit in Nevada. 

For more information, see State of Nevada, Department of Taxation, Official Letter dated 10-10-2019.

If you are an e-commerce seller who is unsure of where you need to get a sales tax permit, feel free to check out our Sales Tax Starter Kit service.