ANSWER: Even if your products aren't taxable, your business can still establish a sales tax obligation (known as "Nexus") in a state. Here's what you need to know:
"Nexus" means your business has sufficient connection or presence in a state, requiring you to register and file sales tax returns there.
Selling non-taxable products doesn't exempt you from Nexus obligations. If your sales exceed a state's Nexus threshold (usually based on sales volume or revenue), you must register and file returns, even if no taxes are due.
If you sold over $100,000 worth of non-taxable items in Georgia, you established Nexus in Georgia. You'd need to register and file a sales tax return, even though your products are not taxable and no sales tax is collected.
States use filings to track business activities within their jurisdictions. Even if no tax is owed, filing ensures compliance and keeps your business records current with state regulations.
Check our blog, Understanding Economic Nexus: A State-by-State Guide, for detailed information on nexus thresholds per state.
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