US States Move Towards Simplified Sales Tax Compliance

New Jersey’s recent proposal to eliminate the 200-transaction threshold for economic nexus reflects a growing push to simplify sales tax compliance. Instead of requiring businesses to track both revenue and transaction counts, the state would base tax obligations solely on gross revenue—aligning tax policy with actual economic activity.

The 200-transaction rule, introduced after South Dakota v. Wayfair, has proven inefficient. Small businesses face unnecessary complexity, while high-value sellers can avoid taxes by keeping transactions under the limit. New Jersey’s $100,000 revenue-only threshold would remove this loophole, creating a fairer and simpler system.

A revenue-only model reduces administrative burdens for businesses and ensures states collect taxes fairly. The current patchwork of state-specific thresholds increases compliance costs and disrupts interstate commerce. Standardizing sales tax laws could simplify operations for businesses, particularly in the digital economy.

With states under pressure to secure stable revenue, expect more legislatures to reevaluate their nexus rules in 2025.