- Economic nexus was established by the U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc. in June 2018
- Trailing nexus is a concept where tax obligations continue even after a business no longer meets the nexus criteria
- Economic nexus is based on economic activity rather than physical presence, with each state setting its own threshold
- Trailing nexus policies vary by state, with some states requiring businesses to continue collecting and remitting sales tax even after nexus is no longer met
- Examples of states with trailing nexus policies include California, Washington, Arizona, Massachusetts, Michigan, and Texas
- Some states, such as Florida, Connecticut, Idaho, New York, and the District of Columbia, do not have trailing nexus policies
Source: taxconnections.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.