How do I work out which state thresholds I have crossed?
You cannot answer it from a single sales figure. The test is per state, so the first requirement is a sales history coded by destination state — where the goods went, or where the customer received the service — rather than by billing address or by currency. Each state own test is then applied to its own slice of that history. Thresholds differ in amount, in the period they are measured over, and in whether they count transactions as well as revenue, so the same total can cross in one state and fall well short in another. Until the sales are split by destination there is nothing to test.
Do transaction counts count or only my sales revenue?
Some states look at the number of separate sales as well as their value, and where they do, either measure crossing can be enough. That changes who is exposed. A seller with a low average order value and a high volume of orders can cross on count while its revenue in the state stays modest, which is the opposite of the intuition most sellers start with. It also means the monitoring has to carry both figures per state rather than a running sales total alone. Where a state applies both measures, work out which one your business sits closer to, because that is the one that will trigger first.
What period does a state measure my sales over?
That varies, and it is the part most often missed. A state may look at a calendar year, at its own fiscal year, or at a rolling period ending in the current month, and it may look at the current period, the preceding one, or either. The consequence is practical: two states with the same headline test can give different answers on identical sales, simply because they are measuring different windows. It also means a threshold can be crossed by a quiet month dropping out of a rolling window rather than by a good month being added. Monitoring has to reproduce each state window, not a convenient common one.
When do I have to start collecting once I cross?
On the date that state rules set, which is rarely the date you notice. Some states expect collection from the next transaction, others from the start of the following period, and some allow a short interval to register first. What is consistent is that the clock runs from the crossing and not from the discovery, so a seller who checks its figures quarterly can find the obligation began some time before. This is why the monitoring interval matters as much as the monitoring itself. Fix the trigger date in writing for each state as it is crossed, because that date governs the first return and everything after it.
I crossed a threshold last year and never registered, now what?
Treat the historical period and the forward position as two separate pieces of work. Exposure runs from the trigger date, and it is tax that should have been added to invoices already issued, so it cannot be recovered from those customers. The first step is evidence: the destination-coded sales history, the crossing date under that state own test, and whether the product was taxable there. With that fixed you can judge the size of the period and choose how to approach the state. Most operate a route for sellers who come forward, and coming forward is on better terms than being found. Registering forward while ignoring the earlier period simply draws attention to it.
If I am over the threshold in one state, am I over elsewhere?
It tells you nothing at all. The amounts differ, the measurement periods differ, and the treatment of transaction counts differs, so each state has to be tested against its own test on its own slice of your sales. Sellers sometimes adopt the lowest threshold they can find and register everywhere they exceed it, which produces registrations in states where nothing was owed and returns that have to be filed forever afterwards. The opposite error is more expensive: taking the highest threshold as a general rule and missing every state that sits below it. Neither shortcut survives contact with the actual figures.
I work remotely from another country for a company back home — who taxes me?
Usually the country you are physically in, because employment income is generally sourced where the work is done, with your residence country taxing it as well if you are resident there and giving credit. Three things follow: your employer may acquire withholding and social security obligations where you sit, a treaty tie-breaker may be needed if both countries call you resident, and a short trip that becomes a long stay can cross a residence threshold nobody was watching. See remote workers and digital nomads.
What is a permanent establishment?
The threshold at which a country may tax a foreign company's business profits. It is met by a fixed place of business — an office, a branch, a workshop — and also by a dependent agent habitually concluding contracts on your behalf, with separate rules for construction sites and, in some treaties, for services performed over a period. Cross it unnoticed and you owe returns and tax in a country you never registered in. See permanent establishment risk.
