Which of the following creates 'nexus' for sales tax purposes under the Supreme Court's Wayfair decision?

Answer options:

Only physical presence in the state.

Economic presence exceeding certain thresholds (e.g., transaction volume or sales revenue).

Solicitation of orders by mail only.

Owning a warehouse in the state.

How to approach this question

Wayfair = Economic Nexus (Sales numbers matter, not just buildings).

Full Answer

B.Economic presence exceeding certain thresholds (e.g., transaction volume or sales revenue).✓ Correct

South Dakota v. Wayfair (2018) overturned the physical presence rule (Quill), allowing states to require remote sellers to collect sales tax based on 'economic nexus' (e.g., >$100k sales or 200 transactions).

Common mistakes

Thinking physical presence is still the only standard.

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