Tax
Nexus (Sales Tax)
Quick definition
The connection with a state that triggers a tax-collection obligation.
Post-Wayfair (2018), states can require remote sellers to collect sales tax once 'economic nexus' thresholds are met — typically $100K–$500K of sales or 200+ transactions per year. Most SaaS and e-commerce startups have nexus in many states within a year of material growth.
Related tax terms
R&D Tax Credit
Federal credit for qualified research expenses, usable against payroll tax by startups.
Delaware Franchise Tax
Annual tax for Delaware corporations, often quoted wildly too high if calculated incorrectly.
QSBS (Qualified Small Business Stock)
Tax exemption for gains on qualifying startup stock held 5+ years.
Section 83(b) Election
Tax election for restricted stock holders to be taxed on grant-date value instead of vesting value.
Frequently asked questions
- What is Nexus (Sales Tax)?
- Post-Wayfair (2018), states can require remote sellers to collect sales tax once 'economic nexus' thresholds are met — typically $100K–$500K of sales or 200+ transactions per year. Most SaaS and e-commerce startups have nexus in many states within a year of material growth.
- Why is Nexus (Sales Tax) important for startups?
- Nexus (Sales Tax) is a tax concept that matters for startup founders because it directly affects fundraising readiness, financial decision-making, or operational discipline at the stage where mistakes are expensive to undo. Founders who understand it have a meaningfully easier time in diligence, board meetings, and investor conversations.
- What category does Nexus (Sales Tax) belong to?
- Nexus (Sales Tax) is a Tax term in the StartupCFO finance glossary — alongside other tax concepts that founders, CFOs, and accountants use in daily startup operations and reporting.
- Where can I learn more about Nexus (Sales Tax)?
- Beyond this definition, see the related tax terms below, or explore StartupCFO's insights and tools that put Nexus (Sales Tax) in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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