You’re a remote seller selling exempt products or services. Maybe it’s manufactured goods, wholesale, groceries, medical equipment, educational materials, or professional services. 

Since your products aren’t taxable, you assume you don’t have to worry about sales tax compliance. Right?

Wrong.

Many remote sellers are unknowingly creating economic nexus in multiple states simply by making sales of exempt goods and services. 

And that means they may be legally required to register, collect, and remit sales tax—even if they’re not collecting a dime from customers. The consequence? Late fees, penalties, interest, audits, and in some cases, personal liability.

Economic nexus laws don’t just look at your taxable sales. In many states, they look at total sales—even if those sales are tax-exempt.

Don’t let your exempt status give you a false sense of security. If you’re not tracking your exposure, you could already be out of compliance.

What You Need to Know: How States Treat Exempt Sales in Nexus Calculations

After the landmark South Dakota v. Wayfair ruling, nearly every state adopted economic nexus laws for remote sellers. But what many don’t realize is that the thresholds used to determine nexus often include more than just taxable sales.

Here’s how it breaks down:

• Most states include exempt retail sales (e.g., groceries, clothing, medical products) when calculating whether you’ve crossed their economic nexus threshold. Selling something tax-exempt doesn’t mean the state ignores it.
  
• Sales for resale (i.e., wholesale sales) are excluded in some states—but included in others. You can’t assume wholesale transactions are always safe from nexus calculations.
  
• Exempt services are another mixed bag. Some states count all services (taxable or not) toward their thresholds. Others count only taxable services—or exclude services entirely.
  
• Only a handful of states (like Florida, Missouri, and North Dakota) calculate nexus based strictly on taxable sales, giving remote sellers of exempt goods more breathing room.

Bottom line: You could hit a state’s economic nexus threshold with tax-exempt sales alone—and never know it until it’s too late.

How States Count

Every state has implemented its own version of economic nexus, but one of the most overlooked nuances is whether exempt sales count toward the threshold.

Here’s the breakdown

Alabama

• Threshold: More than **$250,000 in **annual sales (in prior calendar year); no transaction count threshold. Applies to retail sales of tangible personal property into Alabama (use tax collection required).
  
• Exempt Sales Counted?: Partially. Exempt retail sales (e.g. sales of items that are non-taxable to end consumers) do count toward the $250k threshold. However, wholesale sales for resale (exempt resale transactions) do NOT count, since the threshold is based on retail sales. Likewise, exempt services are not counted (services aren’t part of Alabama’s sales threshold).

Alaska

• Threshold: No state sales tax in Alaska. However, many local jurisdictions (through the Alaska Remote Seller Sales Tax Commission) require remote seller collection if statewide sales exceed $100,000 in the current or previous year. (Prior to 2025, an alternative 200 transaction threshold also applied.)
  
• Exempt Sales Counted?: Yes (for local thresholds). The $100,000 threshold is based on statewide gross sales into Alaska, including exempt sales and services. There are no exclusions – all remote sales contribute toward the local nexus threshold.

Arizona

• Threshold: Annual gross sales exceeding $100,000 (starting 2021 and thereafter; higher thresholds applied in 2019–2020). No transaction count. Applies to sales of tangible personal property or services into Arizona.
  
• Exempt Sales Counted?: Yes. Arizona’s threshold is based on gross proceeds/income, so all sales count. This includes exempt sales of tangible personal property and wholesale sales for resale. Taxable and nontaxable services are also counted toward the threshold. The only notable exclusions are sales made through a marketplace facilitator (if the facilitator is registered/collecting) and certain rentals.
  

Arkansas

• Threshold: More than $100,000 in sales or 200 transactions in the current or previous calendar year. (Both thresholds are alternative – meeting either triggers nexus.)
  
• Exempt Sales Counted?: No. Arkansas calculates the threshold using taxable sales only. Exempt sales of property and exempt services are excluded – they do not count toward the $100k/200 threshold. Also, wholesale sales for resale are not counted (those are exempt). Essentially only taxable retail sales contribute to the threshold.

California

• Threshold: More than $500,000 in sales of tangible personal property in the current or previous calendar year. (California eliminated its prior 200-transaction threshold in 2019 and now uses only the sales threshold.)
  
• Exempt Sales Counted?: Yes. California’s threshold is based on total combined sales of tangible personal property delivered into the state. This includes exempt sales of TPP – for example, sales for resale (wholesale) are specifically included in the threshold count. Marketplace sales made on behalf of a seller also count toward the seller’s total. Services (which are generally not taxable in CA) are not counted – neither taxable nor exempt services are part of the threshold.

Colorado

• Threshold: Exceeds $100,000 in sales in the current or previous calendar year. (CO removed its 200-transaction threshold in 2019; only the $100k sales threshold applies now.)
  
• Exempt Sales Counted?: Yes (retail sales). Colorado defines threshold sales as retail sales of property and services into Colorado. This means sales to end consumers count, including exempt retail sales of tangible goods (e.g. groceries if exempt). Taxable and non-taxable services are also counted in the $100k. Wholesale sales for resale are excluded (since not retail). In summary: all retail sales (taxable or exempt) count; resales do not.
  

Connecticut

• Threshold: $100,000 in sales and 200 transactions in a 12-month period (ending Sept 30 of prior year). Both conditions must be met (an “AND” threshold).
  
• Exempt Sales Counted?: Yes (for sales threshold). Connecticut counts gross receipts from sales of tangible personal property – including exempt sales of goods – toward the $100k. However, exempt services are not counted. Also, while exempt goods count in reaching $100k, sales for resale do not count toward the 200-transaction part (they are excluded from the transaction count). In practice, remote sellers must include all taxable and exempt product sales when measuring $100k, but can ignore pure resale transactions for counting 200 invoices.

Delaware

• Threshold: N/A – Delaware has no sales tax, so economic nexus for sales tax does not apply.
  
• Exempt Sales Counted?: Not applicable. Delaware does not impose sales/use tax on remote sales.
  

District of Columbia

• Threshold: $100,000 in sales or 200 separate retail sales in the current or prior year.
  
• Exempt Sales Counted?: Yes (except exempt services). The DC threshold counts gross receipts from retail sales into DC, including exempt sales of property. (For example, selling tax-exempt groceries still contributes to the $100k/200 threshold.) Taxable services count as well. However, exempt services do not count. Also, sales for resale (wholesale sales) are excluded from threshold calculations.
  

Florida

• Threshold: Over $100,000 in taxable sales during the previous calendar year. (Effective July 1, 2021; Florida uses only a sales amount threshold.)
  
• Exempt Sales Counted?: No. Florida’s threshold explicitly applies to taxable remote sales only. Exempt sales (e.g. sales of exempt groceries or medical items) do not count toward the $100k. Likewise, services (which are mostly exempt in FL) are not counted at all. In short, a remote seller considers only taxable retail sales into Florida when determining if it exceeds $100,000.
  

Georgia

• Threshold: More than $100,000 in gross revenue or 200 retail transactions in the previous or current calendar year. (Prior to 2020, GA’s dollar threshold was $250k.)
  
• Exempt Sales Counted?: Yes (excluding resales). Georgia uses gross revenue from retail sales, which means all retail sales to Georgia customers count, even if the item is tax-exempt. Thus, exempt sales of TPP are included in the threshold. However, sales for resale (non-retail/wholesale) are explicitly excluded. Services (taxable or not) are not part of “retail sales” in GA and are excluded as well.

Hawaii

• Threshold: $100,000 in sales or 200 transactions in the current or preceding calendar year. (Effective July 1, 2018.)
  
• Exempt Sales Counted?: Yes. Hawaii’s General Excise Tax (GET) nexus threshold is based on gross income/proceeds from all sales into Hawaii. This includes exempt sales of tangible property and also services (taxable or exempt) provided in Hawaii. In fact, nothing is excluded – Hawaii counts all sales (tangible or intangible, taxable or not) toward the $100k/200 threshold. (Hawaii’s tax code taxes virtually all transactions via GET, so the nexus threshold likewise considers all gross receipts.)

Idaho

• Threshold: Exceeds $100,000 in sales in the current or prior year. (No transaction threshold; effective June 2019.)
  
• Exempt Sales Counted?: Yes. Idaho’s threshold is based on cumulative gross receipts from sales into Idaho. This includes taxable and exempt tangible product sales, exempt sales of goods, and services (taxable or exempt) as well. Essentially all sales to Idaho customers count toward $100k. The law does not exclude wholesale sales either – sales for resale count in the gross receipts total. There are effectively no exclusions for Idaho’s threshold.

Illinois

• Threshold: $100,000 in sales or 200 transactions in the preceding 12-month period. (Measured quarterly; threshold effective Oct 2018 for state use tax, with local tax nexus rules from 2021.)
  
• Exempt Sales Counted?: Partially. Illinois’ threshold is based on cumulative gross receipts from sales of TPP, which generally includes exempt sales of TPP. However, Illinois law excludes certain categories: sales for resale are not counted, and neither are occasional sales. Also, services are not part of the threshold (Illinois’ nexus law is for sales of TPP only, not services). In sum, exempt retail sales (e.g. sales of items exempt to end-users) count toward $100k/200, but resale transactions and isolated/casual sales do not count.

Indiana

• Threshold: Over $100,000 in sales in the current or prior calendar year (or, prior to 2024, 200 transactions).
  
• Exempt Sales Counted?: Yes. Indiana counts gross revenue from sales into the state, which includes tangible personal property (goods) and electronically delivered products. Exempt sales of property are included in that gross revenue. Notably, Indiana’s law (post-2020) also states sales for resale are counted toward the threshold (i.e. wholesale sales are not excluded). Both taxable and exempt services delivered into Indiana count as well. The only exclusion is marketplace-facilitated sales (if the marketplace is collecting).

Iowa

• Threshold: $100,000 in sales in current or previous calendar year. (200-transaction threshold was eliminated July 2019.)
  
• Exempt Sales Counted?: Yes. Iowa’s threshold uses gross revenue from sales of tangible property, specified digital products, and services into Iowa. This includes exempt sales of goods and also any services (taxable or exempt) delivered into Iowa. Sales for resale are included as well. In short, Iowa counts all sales (taxable or not) toward the $100k. No exclusions are listed in current guidance.

Kansas

• Threshold: More than $100,000 in sales during the current or immediately preceding calendar year. (Effective July 1, 2021; Kansas has no transaction count threshold.)
  
• Exempt Sales Counted?: Yes. Kansas uses “cumulative gross receipts” from sales into Kansas for the threshold. This includes all sales – taxable and exempt – with no exclusions. Kansas explicitly confirmed that “all sales made… regardless of whether the item… is exempt from tax” are included. Even wholesale sales for resale and exempt services count toward the $100k (Kansas taxes many services, but even those services that are exempt would still count for nexus). Marketplace sales are also counted (unless the facilitator is itself subject to a separate threshold rule).

Kentucky

• Threshold: $100,000 in sales or 200 transactions in current or previous year. (Effective Oct 1, 2018; both threshold options.)
  
• Exempt Sales Counted?: Yes. Kentucky counts gross receipts from sales of tangible property and digital property into the state. Exempt sales of property are included in gross receipts toward the threshold. Wholesale sales for resale are also included in Kentucky’s calculation. (Originally, Kentucky excluded services, but as of 2023 taxable and exempt services are included too.) In summary, virtually all sales (goods or services, taxable or exempt) count toward KY’s $100k/200 threshold. Kentucky does not list any exclusions in current guidance.

Louisiana

• Threshold: $100,000 in sales in current or prior year (effective Aug 2023; previously $100k or 200 transactions).
  
• Exempt Sales Counted?: Yes. Louisiana uses gross revenue from sales into the state. Exempt sales of products (e.g. sales of exempt items) are counted in that gross revenue. Taxable and exempt services performed in Louisiana also count toward the threshold. Essentially all sales (including digital goods) contribute to the $100k. The only exclusion is that sales made through a marketplace facilitator are not counted by the individual seller (if the marketplace is registered).

Maine

• Threshold: Over $100,000 in sales in the current or prior calendar year. (200 transactions threshold removed in 2022.)
  
• Exempt Sales Counted?: Yes (goods). Maine’s threshold counts gross sales of tangible personal property delivered into Maine. Exempt sales of property (non-taxable goods) are included in that gross sales figure. Taxable services into Maine also count, but non-taxable services do not count. Wholesale sales for resale are excluded (since Maine specifies retail sales of TPP). In short: exempt goods sales count, but exempt services and resale transactions do not.

Maryland

• Threshold: $100,000 in sales or 200 transactions in the current or previous year. (Effective Oct 1, 2018.)
  
• Exempt Sales Counted?: Yes (goods). Maryland uses gross revenue from sales of tangible personal property, software, and digital goods into the state. Exempt sales of goods and software are included toward the threshold. Taxable services count as well. However, exempt services are excluded. In practice, Maryland counts all product sales (taxable or exempt) toward the $100k/200, but does not count purely service transactions that are non-taxable. Marketplace-facilitated sales are included in a seller’s total as well.

Massachusetts

• Threshold: Over $100,000 in sales in the preceding or current calendar year. (No transaction threshold; effective Oct 2019.)
  
• Exempt Sales Counted?: Yes. Massachusetts counts sales of tangible personal property and services into the state. This includes exempt sales of property (Mass. doesn’t exclude exempt goods). Taxable and exempt services provided to MA customers are also counted. The only major exclusion is marketplace sales facilitated by a registered marketplace (those sales don’t count for the individual seller). Otherwise, all sales (taxable or not) count toward the $100k threshold.

Michigan

• Threshold: $100,000 in sales or 200 transactions in the previous calendar year. (Effective Oct 2018.)
  
• Exempt Sales Counted?: Yes. Michigan counts sales of tangible personal property delivered into the state toward the threshold, and it includes exempt sales in that total. Services are generally not taxed in MI, but any taxable services would count. Michigan’s guidance explicitly does not exclude any sales from the threshold; even marketplace sales count (although practically, marketplace facilitators now collect). So taxable and exempt product sales are included. (There are no listed exclusions for wholesale, but by definition Michigan’s law speaks to retail sales of TPP.)

Minnesota

• Threshold: $100,000 in sales or 200 transactions in a 12-month period (preceding 12 months). (Effective Oct 1, 2018; prior to that a different small threshold was in place.)
  
• Exempt Sales Counted?: Mostly yes. Minnesota counts retail sales into the state, which includes taxable sales and exempt sales to end users. It specifically lists exempt sales (to consumers or exempt entities) as included. Sales to tax-exempt organizations count as well. However, sales for resale (wholesale transactions) are excluded – those do not count toward the threshold. Also, exempt services are not counted (MN doesn’t tax many services, and those are excluded). So Minnesota counts all retail product sales (even if exempt) but excludes resale and non-taxable services.

Mississippi

• Threshold: Over $250,000 in sales in any consecutive 12 months. (Effective Sept 2018; MS uses only a dollar threshold, no transaction count.)
  
• Exempt Sales Counted?: Yes. Mississippi’s threshold is based on total sales made into the state by the remote seller. This includes both taxable and exempt sales of goods. Services (taxable and exempt) count as well. No specific exclusions for wholesale are given, so presumably sales for resale are counted in “total sales” (Mississippi taxes most final sales of goods; wholesale is outside the tax but still part of total sales activity). The only exclusion is marketplace sales (if facilitated) per MS guidance.

Missouri

• Threshold: $100,000 in sales in the previous or current calendar year. (Effective January 1, 2023; MO had no economic nexus prior to 2023.)
  
• Exempt Sales Counted?: No. Missouri’s law specifies the threshold applies to gross receipts from taxable sales of tangible personal property delivered into Missouri. Therefore, exempt sales of TPP (e.g. sales of non-taxable items) are not counted toward the $100k. Likewise, sales for resale are excluded (they are not “taxable sales”). Services are generally not subject to MO sales tax, and indeed neither taxable nor exempt services count toward the threshold. In summary, only Missouri-taxable sales of goods count for nexus; any non-taxable transactions are excluded.

Montana

• Threshold: N/A – Montana has no state sales tax, so no economic nexus threshold for sales tax.
  
• Exempt Sales Counted?: Not applicable (no general sales tax in MT).

Nebraska

• Threshold: $100,000 in sales or 200 transactions in the previous or current calendar year. (Effective April 1, 2019.)
  
• Exempt Sales Counted?: Yes (retail sales). Nebraska uses total retail sales to customers in the state. This includes exempt retail sales of property – e.g. sales to consumers of items like food (exempt) would count. Taxable and exempt services delivered into Nebraska also count. Wholesale sales for resale, sublease, or subrent are specifically excluded. So, exempt sales to end-users count, but resales do not count for the $100k/200 threshold.

Nevada

• Threshold: $100,000 in sales or 200 transactions in the current or preceding calendar year. (Effective Oct 1, 2018.)
  
• Exempt Sales Counted?: Yes (goods). Nevada’s threshold is based on gross revenue from retail sales of tangible personal property into the state. Exempt sales of goods are included in that gross revenue. Marketplace sales count toward the total as well. Wholesale sales for resale are excluded (not retail). Also, sales of services (which Nevada doesn’t tax) are not counted. So Nevada counts all retail product sales (taxable or exempt) toward $100k/200, but not resale or service transactions.

New Hampshire

• Threshold: N/A – New Hampshire has no sales tax, so economic nexus for sales tax is not applicable.
  
• Exempt Sales Counted?: Not applicable (no sales tax in NH).

New Jersey

• Threshold: $100,000 in sales or 200 transactions in the current or prior year. (Effective Nov 1, 2018.)
  
• Exempt Sales Counted?: Yes (goods). New Jersey’s threshold is measured by gross revenue from retail sales of tangible personal property, specified digital products, and taxable services into NJ. Nontaxable (exempt) retail sales of property are explicitly included in the threshold count. Taxable services count as well, even if those services might be exempt in particular cases. Exempt services are the one exclusion – purely non-taxable services are not counted. Also, sales for resale (wholesale) are considered non-retail and thus excluded by definition (the law refers to retail sales). In short, NJ counts all retail product sales (taxable or exempt) toward $100k/200.

New Mexico

• Threshold: $100,000 in sales in the previous calendar year. (Effective July 1, 2019; NM uses only a sales threshold.)
  
• Exempt Sales Counted?: No. New Mexico’s threshold is based on “total taxable gross receipts” from sales of property, licenses, and services into NM. This means only taxable sales are counted. Exempt sales of goods and exempt services are excluded – they do not contribute to the $100k. Wholesale sales for resale are not counted either. Essentially, if a sale wouldn’t be subject to New Mexico’s gross receipts tax, it’s not included in the threshold calculation.

New York

• Threshold: $500,000 in sales and 100 transactions during the immediately preceding four quarters. (Both conditions must be met; effective June 21, 2018.)
  
• Exempt Sales Counted?: Yes (goods). New York’s rule counts cumulative gross receipts from sales of tangible personal property delivered into NY. This includes exempt sales of property – even if the item is exempt (e.g. clothing under $110), those sales still count toward the $500k. Notably, New York clarified that software-as-a-service (SaaS) is treated as tangible property (if taxable) and counts in the sales total. Services (taxable or exempt) are not counted toward NY’s economic nexus; the law is only concerned with sales of tangible property. Also, marketplace sales count toward a seller’s own total (if the marketplace isn’t collecting for them). So in summary, all sales of goods (taxable or not) count for NY’s threshold, but not services.

North Carolina

• Threshold: $100,000 in sales in the current or previous year (or 200 or more transactions). NC uses $100k or 200 transactions.
  
• Exempt Sales Counted?: Yes. North Carolina counts gross sales sourced to the state, which includes the sum of all sales of tangible personal property, digital property, and services into NC. Exempt sales of property are included. Exempt services are also included (NC taxes few services, but the law says the “sum total sales price of services” – implying even exempt ones – are counted toward the nexus threshold). Wholesale sales for resale count as well (they are sales, just exempt by nature, but not excluded). North Carolina does not list any exclusions in its nexus law – effectively all sales (taxable or not) count toward the $100k or 200 transactions.

North Dakota

• Threshold: $100,000 in sales in the calendar year (current or previous). (ND eliminated its 200 transaction threshold mid-2019.)
  
• Exempt Sales Counted?: No. North Dakota’s threshold is based on gross taxable sales into the state. It specifically excludes exempt sales of tangible personal property and exempt services from the count. Only sales that would be subject to ND sales tax (if the seller were registered) are tallied. Thus, tax-exempt goods (e.g. most groceries) and non-taxable services do not count toward $100k. Wholesale sales for resale are also not counted (those are exempt transactions). In summary, North Dakota counts only taxable retail sales in determining the economic nexus threshold.

Ohio

• Threshold: $100,000 in sales or 200 transactions in the current or previous calendar year. (Effective Aug 1, 2019.)
  
• Exempt Sales Counted?: Mostly yes. Ohio’s threshold counts gross receipts from sales of tangible personal property for use in Ohio, as well as services whose benefit is realized in Ohio. This includes exempt sales of property – they are part of gross receipts. However, Ohio excludes sales for resale (i.e. sales in interstate commerce that will be resold). Exempt services are also excluded. So exempt goods count, but wholesale transactions and non-taxable services do not. Marketplace sales facilitated by others count if the marketplace isn’t collecting for the seller.

Oklahoma

• Threshold: $100,000 in sales in the previous 12-month period. (Effective Nov 1, 2019; prior to that OK had a $10,000 reporting threshold.)
  
• Exempt Sales Counted?: No. Oklahoma’s nexus threshold is based on aggregate sales of taxable tangible personal property delivered into Oklahoma. Taxable services also count. But exempt sales of property are excluded. Exempt (non-taxable) services are likewise excluded. And any wholesale sales for resale would not count since those are exempt transactions. In effect, only Oklahoma-taxable sales are tallied toward the $100k. (Notably, before Nov 2019, OK’s $10k rule excluded services entirely; as of 2023 they include taxable services in the $100k, but still exclude exempt items.)

Oregon

• Threshold: N/A – Oregon has no state sales tax, so no economic nexus threshold for sales tax.
  
• Exempt Sales Counted?: Not applicable (no sales tax in OR).

Pennsylvania

• Threshold: $100,000 in sales in the previous 12-month period. (Effective July 1, 2019; PA does not use a transaction count.)
  
• Exempt Sales Counted?: Yes. Pennsylvania’s threshold is based on gross sales of products and services delivered into PA. This includes exempt sales of tangible products and exempt services. In fact, PA counts all sales – taxable or exempt – in determining if a remote seller exceeds $100k. The only exclusion is for sales made through a registered marketplace facilitator that is collecting on the seller’s behalf (those sales wouldn’t count for the seller individually). But exempt items (like food or clothing) sold directly by the remote seller do count toward the threshold.

Rhode Island

• Threshold: $100,000 in sales or 200 transactions in the prior calendar year. (Effective July 2019; RI previously had a notice-and-report rule before switching to economic nexus.)
  
• Exempt Sales Counted?: Yes. Rhode Island counts gross revenue from sales of tangible personal property, prewritten software, and digital products into the state. This includes wholesale/retail sales for resale and exempt sales of goods. Taxable and exempt services are also counted toward the threshold. The only exclusion is exempt services? Actually, line [22†L1403-L1406] shows “Excluded: exempt services.” So yes, exempt services are not counted. Otherwise, all sales of goods (taxable or not) count, as do any taxable services. (Marketplace sales count too.)

South Carolina

• Threshold: $100,000 in gross revenue in the previous or current calendar year. (Effective Nov 1, 2018; SC uses only a dollar threshold.)
  
• Exempt Sales Counted?: Yes. South Carolina’s threshold is based on gross revenue from sales of tangible personal property, electronically transferred products, and services into SC. Exempt sales of property are included in “gross revenue”. Taxable and exempt services rendered in SC also count. SC does not exclude wholesale transactions or exempt items – in fact, SC explicitly says there are no exclusions to the $100k threshold. (All marketplace sales count as well, but practically facilitators collect.) So all sales (taxable, exempt, resale, etc.) are counted in determining if $100k is exceeded.

South Dakota

• Threshold: $100,000 in sales in previous or current calendar year (South Dakota eliminated its 200 transaction alternative in 2023).
  
• Exempt Sales Counted?: Yes. South Dakota’s law (the one upheld in Wayfair) counts gross revenue from sales of tangible personal property, any products transferred electronically, or services delivered into SD. This includes exempt sales of goods and taxable or exempt services. SD does not list any exclusions (the original law counted “taxable and exempt sales”). Thus, all sales – whether for resale or to exempt entities – count toward the $100k threshold (SDCL 10-64-2 includes sales for resale in the threshold). There are no exclusions in current law.

Tennessee

• Threshold: $100,000 in sales in the previous 12 months. (Effective July 1, 2019; note TN’s threshold was $500k until Oct 2020, then lowered to $100k.)
  
• Exempt Sales Counted?: Mostly yes. Tennessee counts “retail sales” to customers in TN for the threshold. That includes retail sales of tangible property or services, whether taxable or not. So exempt retail sales (e.g. sales of exempt goods) are included. However, wholesale sales for resale are excluded (not retail). Also, sales made through a marketplace facilitator are excluded for the individual seller. In summary, TN counts all direct sales to consumers (taxable or exempt) toward $100k, but resale transactions do not count.

Texas

• Threshold: $500,000 in total Texas revenue in the preceding 12 calendar months. (Effective Oct 1, 2019; measured on a rolling annual basis.)
  
• Exempt Sales Counted?: Yes. Texas defines the threshold by “total Texas revenue” from sales of tangible personal property and services. This includes gross revenue from all Texas sales – taxable and nontaxable. The Texas Comptroller explicitly states the $500k is based on **gross receipts from all sales into Texas, including sales for resale and sales to exempt entities. In other words, exempt product sales and exempt services are counted toward the $500k. (There are no exclusions; even marketplace sales count, though practically marketplaces collect for their sellers.) If a remote seller’s only sales are exempt, they still must register once they exceed $500k in total Texas revenues.

Utah

• Threshold: $100,000 in sales or 200 transactions in the current or prior year. (Effective Jan 1, 2019.)
  
• Exempt Sales Counted?: Yes. Utah uses gross revenue from sales of tangible personal property and services into the state. Taxable and exempt services count, and exempt sales of goods count as well. Wholesale sales for resale are also included (Utah does not explicitly exclude them). The only exclusion is sales made through a marketplace facilitator (if the facilitator is collecting). So effectively all direct sales (taxable or not) are counted in Utah’s $100k/200 threshold.

Vermont

• Threshold: $100,000 in sales or 200 transactions in any preceding 12-month period. (Effective July 1, 2018.)
  
• Exempt Sales Counted?: Yes. Vermont counts sales of tangible personal property and services into the state. This includes exempt sales of goods and exempt services – they are part of the threshold determination. Wholesale sales for resale are also counted toward the threshold. Vermont basically includes all remote sales when measuring the $100k/200. Importantly, however, Vermont law provides that if a business makes only tax-exempt sales into Vermont, it is not required to register (even if it exceeds the threshold). So the threshold can be met with exempt sales, but a remote seller of exclusively exempt items isn’t forced to register (until it makes a taxable sale).

Virginia

• Threshold: $100,000 in sales or 200 transactions in the current or previous calendar year. (Effective July 1, 2019.)
  
• Exempt Sales Counted?: Yes (goods). Virginia’s threshold is based on gross sales of tangible personal property (and certain services) into Virginia. Exempt sales of property are included in gross sales. Taxable services count, but exempt services do not. Sales for resale are explicitly excluded. In summary, retail sales of goods (taxable or exempt) count toward VA’s threshold, whereas wholesale sales and non-taxable services are not counted.

Washington

• Threshold: $100,000 in cumulative gross receipts in the current or prior year. (Effective Oct 1, 2018; WA has no transaction count.)
  
• Exempt Sales Counted?: Yes. Washington’s threshold is based on gross income from all business activities in Washington. This means all sales into WA count: retail sales, wholesale sales, services, etc.. Washington explicitly includes wholesale sales (sales for resale) and exempt sales of tangible personal property in the threshold calculation. Taxable and exempt services are also included. Essentially no sales are excluded in determining if a remote seller exceeds $100k in WA. (If a remote seller only makes wholesale sales and no retail sales, WA law still considers the $100k threshold met, but note that WA provides a wholesale seller with no retail activity is not required to register solely due to wholesales – see WI and VT have similar notes).

West Virginia

• Threshold: $100,000 in sales or 200 transactions in the current or prior calendar year. (Effective Jan 1, 2019.)
  
• Exempt Sales Counted?: Yes. West Virginia counts gross sales of tangible personal property and services into WV. Exempt sales of goods are included. Exempt services are included as well. Wholesale sales for resale are counted toward the threshold. WV does not provide any exclusions in its nexus statute – effectively all sales (taxable or exempt) count toward the $100k/200 threshold. (There was no exclusion even if a remote seller’s sales are entirely exempt.)

Wisconsin

• Threshold: $100,000 in sales in the previous or current year. (WI had a 200 transaction alternative prior to Feb 2021, but now only $100k.)
  
• Exempt Sales Counted?: Yes. Wisconsin uses annual gross sales into WI for the threshold. This includes sales of tangible personal property and services whether taxable or exempt. Exempt sales of goods count, as do exempt (non-taxable) services. Wholesale sales for resale count as well (WI even notes businesses making only nontaxable sales must still consider the threshold). Wisconsin explicitly states that no sales are excluded – however, it provides that a business making only nontaxable (exempt) sales into WI is not required to register for sales tax. So a remote seller exceeds $100k with exempt sales, they technically have nexus but WI does not compel registration until a taxable sale occurs.

Wyoming

• Threshold: $100,000 in sales in current or previous year. (Wyoming’s 200 transaction threshold was removed after July 1, 2024.)
  
• Exempt Sales Counted?: Yes. Wyoming’s statute counts gross sales of tangible personal property, admissions, and services into the state. It explicitly includes taxable, exempt, and wholesale sales in the threshold. That means exempt sales of goods and sales for resale are included. Exempt and taxable services also count. The only exclusion is marketplace-facilitated sales (if the facilitator is registered). Otherwise, all sales count toward the $100k.

What You Can Do: Know Where You Stand

If you think you’re not liable because your products or services are exempt, think again. Many state departments of revenue don’t distinguish between taxable and exempt sales when evaluating economic nexus. And if you cross a threshold and fail to register, you risk:

• Owing back taxes and penalties
  
• Facing audits that can stretch back years
  
• Losing eligibility for voluntary disclosure or amnesty programs
  
• Damaging your reputation and business relationships
  

Bottom line: You could hit a state’s economic nexus threshold with tax-exempt sales alone—and never know it until it’s too late.

The good news? You don’t have to figure it out alone.

Don’t wait until a state tax agency comes knocking. We’ve created a Free Nexus Study Worksheet to help you track your sales by state and determine where you might have triggered economic nexus — even if your products or services are exempt.

Still unsure? We offer a free consultation to walk you through your exposure and what to do next.

Your products may be exempt. Your business risk isn’t.

Use the tools. Get compliant. And stay ahead of the audit risk.