Selling into another state can make your company owe that state’s income, franchise or gross receipts tax, not just sales tax. The checker below looks at each state’s bright-line test, your physical presence there and what you sell, then flags where you likely have nexus.
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Check your state income tax nexus
See where your company may owe state income, franchise or gross receipts tax, based on each state’s bright-line test, your physical presence and what you sell.
Your activity by state, for the tax year
Standards last reviewed September 2026. Many states have no bright-line test and decide nexus from your activities; local taxes, pass-through entity rules and withholding for remote employees are not covered. Results are estimates for general information only, not legal, tax or financial advice. Confirm them with your own CPA, tax adviser or attorney before making decisions. Using this tool does not create a client relationship with Catching Numbers Inc.
How income tax nexus works
A state can tax your business income when you have enough connection, or nexus, with it. There are three common ways to get there:
- Physical presence: an office, a warehouse, inventory (including inventory Amazon stores for you), or employees working in the state, including remote employees.
- A bright-line economic test: about a dozen states set a dollar threshold, such as $500,000 of sales into the state, above which you have nexus even with no presence there.
- Doing business in the state: most other states have no fixed threshold and look at your activities, which for services and software can mean regular sales to customers there.
What P.L. 86-272 protects, and what it doesn’t
Public Law 86-272 is a federal law that stops a state from taxing your net income if your only activity there is asking for orders of physical goods that are approved and shipped from outside the state. It does not protect services, SaaS or digital products, and it does not apply to gross receipts taxes such as the Washington B&O tax, the Ohio commercial activity tax or the Texas franchise tax. Several states, including New York, New Jersey and Massachusetts, now treat some online activities, such as post-sale chat support, as going beyond protected solicitation.
Bright-line nexus standards by state
| State | Business tax | Bright-line economic nexus test (any one) | Notes |
|---|---|---|---|
| Alabama | Corporate income tax | $675,000 in sales, $68,000 of property, $68,000 of payroll or 25% of your total sales, property or payroll (2025) | Thresholds are indexed; these are the 2025 amounts. |
| Alaska | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Arizona | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Arkansas | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| California | Corporation franchise and income tax | $757,070 in sales, $75,707 of property, $75,707 of payroll or 25% of your total sales, property or payroll (2025) | Indexed every year; 2025 amounts are the latest published. California also charges an $800 minimum franchise tax. |
| Colorado | Corporate income tax | $500,000 in sales, $50,000 of property, $50,000 of payroll or 25% of your total sales, property or payroll | |
| Connecticut | Corporation business tax | $500,000 in sales | |
| Delaware | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. Delaware also has a gross receipts tax that applies to businesses operating there. |
| District of Columbia | Corporate franchise tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Florida | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Georgia | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Hawaii | Corporate income tax | $100,000 in sales or 200 transactions | |
| Idaho | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Illinois | Corporate income and replacement tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Indiana | Adjusted gross income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Iowa | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Kansas | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Kentucky | Corporation income tax and LLET | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Louisiana | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Maine | Corporate income tax | $500,000 in sales, $250,000 of property, $250,000 of payroll or 25% of your total sales, property or payroll | |
| Maryland | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Massachusetts | Corporate excise | $500,000 in sales | P.L. 86-272 does not protect against the non-income measure or the minimum excise. |
| Michigan | Corporate income tax | $350,000 in sales | The $350,000 test applies together with active solicitation in Michigan. |
| Minnesota | Corporation franchise tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Mississippi | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Missouri | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Montana | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Nebraska | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Nevada | Commerce tax | No bright-line test | No corporate income tax. The commerce tax applies only when Nevada gross revenue is over $4 million a year. |
| New Hampshire | Business profits tax and business enterprise tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. Filing thresholds apply to both taxes. |
| New Jersey | Corporation business tax | $100,000 in sales or 200 transactions | Businesses protected by P.L. 86-272 still file and pay the minimum tax. |
| New Mexico | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| New York | Corporation franchise tax | $1,283,000 in sales (2026) | Indexed; this is the threshold for 2024 to 2026. New York also applies a narrower reading of P.L. 86-272 to internet activity. |
| North Carolina | Corporate income and franchise tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| North Dakota | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Ohio | Commercial activity tax (CAT) | $500,000 in sales, $50,000 of property, $50,000 of payroll or 25% of your total sales, property or payroll | No corporate income tax. CAT is due only on Ohio receipts above the $6 million annual exclusion. |
| Oklahoma | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Oregon | Corporate excise tax and corporate activity tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. The corporate activity tax requires registration above $750,000 of Oregon commercial activity and is due above $1 million. |
| Pennsylvania | Corporate net income tax | $500,000 in sales | |
| Rhode Island | Business corporation tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| South Carolina | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| South Dakota | None | Not applicable | No corporate income or gross receipts tax. |
| Tennessee | Franchise and excise tax | $500,000 in sales, $50,000 of property, $50,000 of payroll or 25% of your total sales, property or payroll | P.L. 86-272 protects only against the excise tax; the franchise tax on net worth still applies. |
| Texas | Franchise (margin) tax | $500,000 in sales | No corporate income tax. No franchise tax is due if total revenue is at or below $2.65 million (2026 and 2027 reports). |
| Utah | Corporate franchise and income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Vermont | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Virginia | Corporate income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Washington | Business and occupation (B&O) tax | $100,000 in sales | No corporate income tax. B&O tax is on gross receipts. |
| West Virginia | Corporate net income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Wisconsin | Corporate franchise and income tax | No bright-line test | No bright-line test; nexus depends on whether you are doing business in the state. |
| Wyoming | None | Not applicable | No corporate income or gross receipts tax. |
Frequently asked questions
Does selling SaaS into a state create income tax nexus?
It can. P.L. 86-272 only protects sales of physical goods, so a SaaS company that passes a state’s bright-line threshold, or does business there regularly, may need to file and pay that state’s income or franchise tax.
Does one remote employee create nexus?
Usually, yes. An employee working from a state is a physical presence, and it also brings payroll withholding and registration requirements in that state.
Which states have no corporate income tax?
Nevada, Ohio, South Dakota, Texas, Washington and Wyoming. Nevada, Ohio, Texas and Washington tax gross receipts or margins instead, so businesses can still owe tax there.
Is income tax nexus the same as sales tax nexus?
No. They are separate tests with different thresholds. Use our sales tax nexus checker for sales tax.
Growing into new states?
We keep multi-state books clean and apportionment-ready, so your tax CPA can file quickly and accurately.