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 North Dakota, 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 North Dakota 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 North Dakota

1. Economic nexus in North Dakota

If you had $100,000 or more in taxable sales in  North Dakota 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 North Dakota.  Nexus has been created based on your volume of sales.

For more information, please see North Dakota Remote Seller Sales Tax. 

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 North Dakota

North Dakota considers a seller to have sales tax nexus in the state if any of the following is true for the seller:

1. Has or maintains an office, distribution house, sales house, warehouse, or other place of business.
2. Has sales staff or agents within the state demonstrating products, soliciting sales or taking orders. 
3. Delivers goods into North Dakota by retailers’ vehicles or employees.
4. Third-party contractors work within North Dakota providing service to customers.

For more information, see North Dakota Sales Tax Newsletter SB  2165.  

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

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

North Dakota is a marketplace collection state.  All sales on Amazon, eBay, and other approved marketplaces will have the sales tax remitted by the marketplace on your behalf. If all of your sales in North Dakota are on approved marketplaces, you are not required to get a sales tax permit.  

For more information, see North Dakota Remote Seller Sales Tax. 

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.

Related Blog Content

How to Register for a Sales Tax Permit in North Dakota

How to File and Pay Sales Tax in North Dakota