What is state tax nexus and does it apply to me as a freelancer?

State tax nexus means you have a sufficient connection to a state that it can require you to pay taxes or collect sales tax there. For self-employed individuals who work remotely, nexus can be surprisingly complex. **Physical presence nexus (clearest):** If you live in a state, you owe income tax there. If you travel to a client's state to perform work in person, you may also owe income tax there — many states tax income earned within their borders. **Economic nexus (growing):** After the 2018 South Dakota v. Wayfair Supreme Court decision, many states now assert nexus based on revenue thresholds alone — no physical presence required. This applies primarily to sales tax, but some states also assert income tax jurisdiction based on economic activity. **Remote work nexus:** If you work from home in State A for a client based in State B: - Generally, you owe income tax in State A (where you work and live) - You do NOT usually owe State B income tax just because your client is there - Exception: New York's "convenience of the employer" rule — if a NY employer requires you to work remotely, you may owe NY income tax **Sales tax nexus:** If you sell physical products or certain digital goods/services across state lines, check each state's economic nexus thresholds (typically $100,000 in sales or 200 transactions).

• You owe income tax in your state of residence on all worldwide income
• Work performed physically in another state may create income tax nexus there
• Remote work for out-of-state clients generally only taxed in your home state
• New York 'convenience rule' exception — NY can tax remote workers for NY employers
• Sales tax nexus is separate — economic nexus thresholds vary by state