A US company files in every state where it has "nexus" — a connection strong enough that the state may tax it. Nexus is created by physical presence (an office, employees, inventory) or, since the 2018 Wayfair decision, by enough economic activity in the state even with no physical footprint. Once you cross a state's threshold, you owe a return there, and your income gets split across states through a formula called apportionment.
Two kinds of nexus trigger a state return: physical presence (people, property, inventory) and economic nexus (sales over a dollar threshold), the latter expanded after South Dakota v. Wayfair (2018).
Sales-tax nexus and income-tax nexus are different bars — crossing one does not automatically cross the other, and most states use a ~$100,000 / 200-transaction line for sales tax but a higher (or no fixed) line for income tax.
If you sell only tangible goods and your in-state activity is just soliciting orders, federal Public Law 86-272 can still shield you from a state's net income tax.
Multi-state income is divided by apportionment — increasingly a single-sales-factor formula based on where your customers are.
For a non-resident founder selling software or services over the internet with no US staff or inventory, a single home-state entity usually means a single state return — multi-state filing kicks in once you put people, property, or large in-state sales volume on the ground.
What is nexus, and why does it force extra state returns?
Nexus is the legal link between your company and a state that gives the state the power to tax you. No nexus, no filing obligation; cross the nexus line, and that state can require a tax return, a registration, and its own minimum fees.
Your formation state is only the starting point.
Forming in Delaware or Wyoming makes you a taxpayer there, but it says nothing about the other 49 states. Each state sets its own nexus rules, so a single company can end up filing in five states while being incorporated in one. The question is never "where am I registered" — it is "where have I created a taxable connection."
What actually triggers nexus in a state?
Two broad categories create nexus: physical presence and economic activity. Physical presence is the old, settled rule; economic nexus is the newer one that caught thousands of remote sellers off guard after 2018.
Physical presence is the easy case to spot.
If you have an office, a leased warehouse, employees or in-state contractors, or inventory sitting in a state (including goods stored in a third-party fulfillment warehouse), you have physical nexus there — full stop. Economic nexus is subtler: under South Dakota v. Wayfair, the Supreme Court held in 2018 that a state can require tax collection based purely on a seller's sales volume, with no physical presence at all.
Most states adopted a sales-tax economic-nexus threshold modeled on South Dakota's: roughly $100,000 in in-state sales or 200 separate transactions in a year.
Inventory you never see can create nexus. Stock stored in a fulfillment center in a state is your property in that state — and that alone is physical presence.
Is sales-tax nexus the same as income-tax nexus?
No — and conflating the two is the most common multi-state mistake. Sales tax and income tax are separate taxes with separate nexus tests, and you can owe one without the other.
The thresholds are not the same number.
The ~$100,000 / 200-transaction line is a sales-tax standard. For income tax, states set their own bars: some use a fixed dollar figure of in-state sales (often higher), some apply a percentage-of-total-sales test, and some have no published floor at all and assert nexus on "economic presence." The table below shows how different the two regimes look.
| Dimension | Sales-tax nexus | Income-tax nexus |
|---|---|---|
| Typical trigger | ~$100,000 in sales OR 200 transactions (post-Wayfair) | Higher dollar threshold, % of total sales, or no fixed floor |
| What you owe | Collect and remit tax on in-state sales | File a return; pay tax on apportioned income |
| Federal shield available? | No | Yes — Public Law 86-272 (tangible goods only) |
| Crossing one crosses the other? | Not automatically | Not automatically |
California is the clearest income-tax example. As of June 2026, the Franchise Tax Board treats you as "doing business" — and therefore owing the return and the $800 minimum franchise tax — once your California sales, property, or payroll exceed an indexed threshold (for the 2025 tax year, $757,070 in sales, or $75,707 in property or payroll, or 25% of your totals, whichever is less).
Treat every new state as two separate questions: do I have to collect its sales tax, and do I have to file its income-tax return? The answers can differ, and missing either one is what produces back taxes and penalties.
What is Public Law 86-272, and can it protect me?
Public Law 86-272 is a 1959 federal law that bars a state from taxing your net income if your only activity in the state is soliciting orders for tangible personal property — provided the orders are approved and shipped from outside the state. It is a genuine, still-valid shield, but a narrow one.
It only covers tangible goods.
Under the statute itself, the protection applies only when you sell physical products and do nothing in the state beyond solicit orders that are accepted and filled elsewhere. It does not cover services, software-as-a-service, licensing, leasing, or most digital products — and states, guided by the Multistate Tax Commission's revised interpretation, increasingly treat ordinary website interactions (cookies, in-state app support, chat) as activities that blow the protection. So a software founder usually cannot rely on it, while a company shipping physical widgets into a state often can.
How is my income split across states?
Once you file in more than one state, you do not pay full tax on the same dollar in each — you divide your income among the states through apportionment. The dominant modern method is the single-sales-factor formula, which apportions income based on the share of your sales that occur in each state.
The trend is to tax based on where your customers are, not where your operations are.
Older formulas weighted property and payroll alongside sales, which penalized companies for putting offices and staff in a state. Most states have moved to a single-sales-factor approach, so a company with all its people in one state but customers nationwide apportions income to each state by its sales there. The practical effect: your customer map, more than your office map, now drives which states get a slice.
Do non-resident and internet-native founders need to file in many states?
Usually not — and this is the StableCorp-specific insight the generic "register everywhere" guides skip. If you are a founder abroad running a software or services business with no US office, no US employees or contractors, and no inventory stored in a US warehouse, you typically have nexus only in your formation state, which means one state return — not a stack of them.
The thing that actually creates multi-state exposure is physical: people, property, or inventory in a state.
A remote SaaS customer in Texas does not, by itself, drag a Wyoming LLC into a Texas income-tax filing the way a Texas warehouse or a Texas employee would. Where founders get burned is the inventory-in-a-fulfillment-center trap and the misread that a single online sale equals nexus — it usually does not. If you do put boots on the ground in a second state, that is also when you typically need to foreign qualify there, and the tax registration rides along with it.
StableCorp forms your Wyoming LLC or Delaware C-Corp with the home-state registered agent included, secures the EIN, opens the US bank account, and runs USD plus USDC/USDT payments on Solana, Ethereum, and Polygon — and can also onboard an entity you already have. Keeping your footprint in one state keeps your tax map simple; see full pricing.
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Frequently asked questions
Does forming in Delaware mean I only file in Delaware?
No. Your formation state is one filing; every other state where you have physical or economic nexus is a separate one. A Delaware C-Corp with an employee in New York and a warehouse in Texas can owe returns in all three.
Is one remote customer in a state enough to require an income-tax return?
Generally no. A single online sale rarely creates income-tax nexus on its own. Income-tax filing is triggered by physical presence or by crossing the state's economic threshold — a meaningful, recurring volume of in-state sales, not one transaction.
If I store inventory in an out-of-state fulfillment center, do I have nexus there?
Usually yes. Inventory you own sitting in a warehouse in a state is your property in that state, and that physical presence creates nexus for both sales and income tax — even if you have never set foot there.
This article is general information, not legal or tax advice. State nexus definitions, thresholds, apportionment formulas, and fees change, and Public Law 86-272 interpretations are actively litigated — confirm current rules with the relevant state tax agency or a qualified advisor before filing. As of June 2026, the figures above reflect official sources and StableCorp's founder-verified facts sheet.
Sources
U.S. Supreme Court — South Dakota v. Wayfair, Inc. (2018) opinion — https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf
Public Law 86-272 — full statutory text (73 Stat. 555, 1959) — https://www.congress.gov/86/statute/STATUTE-73/STATUTE-73-Pg555.pdf
Multistate Tax Commission — Statement of Information on Public Law 86-272 — https://www.mtc.gov/wp-content/uploads/2023/02/StatementofInfoPublicLaw86-272.pdf
California Franchise Tax Board — Doing business in California — https://www.ftb.ca.gov/file/business/doing-business-in-california.html