New York Economic Nexus: $500,000 AND 100 Transactions — Both Prongs Must Be Met

New York's Dual-Prong Economic Nexus Rule

Under New York Tax Law §1101(b)(8)(iv), a remote seller is considered a “person required to collect tax” if, during the immediately preceding four sales tax quarterly periods, the seller made more than $500,000 in gross receipts from the sale of tangible personal property delivered in New York and made more than 100 sales of tangible personal property delivered in the state. Both conditions must be true at the same time. This is the conjunctive standard.

The law took effect on June 1, 2019, roughly one year after the Supreme Court's South Dakota v. Wayfair decision opened the door for states to impose collection obligations on remote sellers without physical presence. New York chose not to mirror South Dakota's $100,000/200-transaction disjunctive model. Instead, it set a much higher bar — and made both prongs mandatory.

The New York Department of Taxation and Finance administers the rule. Sellers who meet both prongs must register for a Certificate of Authority and begin collecting New York state sales tax (4%) plus any applicable local taxes (which can push the combined rate to 8.875% in New York City). The registration obligation begins on the first day of the sales tax quarterly period following the period in which both thresholds were exceeded.

Conjunctive vs. Disjunctive: Why the “AND” Matters

The distinction between conjunctive and disjunctive thresholds is one of the most consequential — and most overlooked — details in multi-state sales tax compliance. Most states adopted a disjunctive standard after Wayfair: $100,000 in sales or 200 transactions. Meeting either condition triggers nexus. New York's conjunctive “AND” means you must cross both lines.

The practical consequence is significant for high-revenue, low-volume sellers. Consider an industrial equipment supplier selling $1.5 million worth of machinery to 30 New York manufacturers annually. In Illinois (disjunctive, $100K or 200 transactions), that seller has nexus on the dollar prong alone. In New York, that same seller has no economic nexus — $1.5M exceeds $500K, but 30 transactions falls far short of the 100-transaction requirement. Both prongs must be met, and this seller only satisfies one.

How “Receipts” Are Defined Under Tax Law §1101(b)(8)(vi)

New York Tax Law §1101(b)(8)(vi) defines the receipts used for the economic nexus calculation. “Receipts” means the gross receipts from sales of tangible personal property delivered in New York. Several details in this definition matter for compliance:

• Tangible personal property only — unlike states such as Texas that include taxable services in their threshold calculation, New York's economic nexus threshold applies specifically to sales of tangible personal property. Sales of services, even taxable ones, are not counted toward the $500,000 receipts prong for economic nexus purposes
• Delivered in the state — the property must be delivered to a New York address. The seller's location is irrelevant. A California-based seller shipping widgets to a Manhattan office is making a sale “delivered in” New York
• Gross receipts, not net — the threshold uses gross receipts before deductions for returns, allowances, or discounts. If you sell $520,000 in goods to New York and accept $30,000 in returns, your receipts figure for threshold purposes is still $520,000
• Exempt sales may count — sales of tangible personal property that are exempt from New York sales tax (such as certain clothing items under $110) can still count toward the $500,000 receipts threshold. The threshold measures economic activity in the state, not taxable revenue

This definition creates a narrower scope than many sellers expect. A consulting firm generating service revenue in New York — even millions of dollars — does not count that revenue toward the economic nexus receipts threshold. Only tangible personal property sales matter for this calculation.

The Four Quarterly Periods Lookback and the June 1, 2019 Effective Date

New York measures both prongs over the “immediately preceding four sales tax quarterly periods.” New York's sales tax quarters follow a non-standard calendar:

• March 1 – May 31
• June 1 – August 31
• September 1 – November 30
• December 1 – February 28/29

The lookback period is the four most recently completed quarters. At the end of each quarter, you assess whether both prongs were met during those four quarters combined. If yes, your collection obligation begins on the first day of the next quarterly period.

For example: if your sales from March 1, 2025 through February 28, 2026 (four quarterly periods) exceed $500,000 in gross receipts and include more than 100 transactions of tangible personal property delivered in New York, your obligation to collect begins March 1, 2026 — the start of the next quarterly period.

This is different from the rolling 12-month lookback used by states like Texas, or the prior-calendar-year approach used by California. New York's quarterly structure means the assessment window shifts in three-month increments, not continuously or annually.

What Happens If You Cross One Prong but Not the Other

This is where New York's conjunctive standard produces outcomes that surprise sellers accustomed to disjunctive states. If you exceed $500,000 in New York receipts during the lookback period but complete only 80 transactions, you do not have economic nexus. Conversely, if you complete 200 transactions but your gross receipts total only $300,000, you also do not have economic nexus.

There is no “partial” nexus or conditional obligation. You either meet both prongs and must collect, or you do not meet both and have no economic nexus obligation. There is no requirement to register, monitor, or report if only one prong is satisfied.

However, sellers near either threshold should monitor closely. The assessment recalculates at the end of each quarterly period. A seller at $480,000 and 95 transactions could cross both prongs in the next quarter and face a collection obligation starting the quarter after that. Build quarterly threshold tracking into your compliance workflow — especially during peak selling seasons like Q4, when a holiday surge can push both metrics over the line simultaneously.

NY Marketplace Facilitator Rules: A Separate Standard

New York's marketplace facilitator law, also effective June 1, 2019, imposes a separate collection obligation on marketplace providers. A marketplace facilitator must collect and remit New York sales tax on behalf of its marketplace sellers if the facilitator itself exceeds $500,000 in receipts and more than 100 transactions from sales facilitated into New York during the preceding four quarterly periods.

This is a separate determination from the individual seller's economic nexus analysis. Amazon, for example, easily exceeds both prongs as a facilitator and therefore collects tax on all New York sales made through its platform — regardless of whether any individual Amazon seller has their own economic nexus in New York.

For individual sellers, this creates a layered compliance picture. If all of your New York sales flow through a qualifying marketplace facilitator that is already collecting tax, you may not need your own Certificate of Authority — provided you do not independently meet both prongs through direct sales or sales through non-qualifying platforms. However, if you have any direct sales channel (your own website, phone orders, wholesale) and independently meet both thresholds, you must register and collect on those direct sales.

For a broader view of how marketplace facilitator obligations vary by state, see the marketplace facilitator laws by state guide.

New York vs. Other $500K-Threshold States

Three states share the $500,000 revenue threshold — New York, California, and Texas — but each implements it differently. Understanding those differences is critical for multi-state compliance planning.

New York's conjunctive standard makes it the hardest of the three to trigger. A seller doing $600,000 across 80 large orders has nexus in both California and Texas but not in New York. This creates planning opportunities — and compliance traps for sellers who assume all $500K states work the same way. For the full state-by-state breakdown, see the sales tax nexus thresholds by state comparison.