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This article applies to:

  • Product: ONESOURCE Indirect Tax,ONESOURCE Sales and Use Tax Compliance

Economic nexus tracking

Economic activity is tracked by jurisdiction and compared with selected economic nexus thresholds. Thresholds may be based on sales revenue, transaction count, or both.
The economic nexus tracking feature monitors remote sales into U.S. states and Canadian provinces or territories where the customer is not registered and doesn't have an established tax nexus.
Selling across North America can create tax compliance obligations without a physical presence in a jurisdiction. Economic nexus requirements vary by state, province, and territory, and thresholds may change over time.
Without automated tracking, economic nexus compliance may require manual processes to:
  • Aggregate sales by jurisdiction and reporting period
  • Review economic nexus thresholds for each jurisdiction
  • Identify jurisdictions where registration may be required
  • Monitor changes to thresholds and ongoing sales activity
Economic nexus tracking reduces manual effort by providing visibility into jurisdictions where sales activity may create a registration requirement. This supports earlier identification of potential obligations, helps reduce the risk of missed requirements, and improves preparation for potential audit inquiries.

Economic nexus dashboard

The economic nexus dashboard is the OSU CoCounsel homepage. After signing in to Compliance and selecting
OSU CoCounsel
, the dashboard opens automatically.
By default, the dashboard shows a map of the United States with economic nexus information by state for the selected workarea. The map provides a high-level view of sales activity across U.S. jurisdictions and helps identify current nexus status.
The dashboard highlights states with the following statuses:
  • Exceeded Threshold:
     Sales activity has reached or exceeded the economic nexus threshold.
  • Approaching Threshold:
     Sales activity is approaching (default 80%) the economic nexus threshold.
  • Below Threshold:
     Sales activity is under the economic nexus threshold.
  • Registered:
     Registration is active in the state.
  • Registering:
    Registration is currently in progress.
  • No Nexus Tracking:
     Economic nexus tracking hasn't been configured for the state.
This view provides a centralized summary of economic nexus exposure across U.S. states and supports faster identification of potential registration requirements.

Configure economic nexus tracking

Economic nexus tracking can be configured for selected states in
Step 1: Entity Settings of the Entity Configuration Wizard
.
The
Approaching Threshold
 setting determines when a state is identified as approaching its economic nexus threshold. The default approaching threshold limit is 80%. This value can be adjusted based on internal compliance requirements. For example, when the limit is set to 80%, a state is marked as Approaching Threshold when sales activity reaches 80% of the revenue threshold, transaction threshold, or both.
Select the states where economic nexus activity should be monitored. OSU CoCounsel tracks economic nexus only when both of the following conditions are met:
  • Nexus tracking is turned
    On
     for the state.
  • No tax return is registered for the state.
If one or more returns are registered for a state, OSU CoCounsel assumes that an active registration with the tax authority already exists. Economic nexus tracking is not required for that state and is not performed.

Review of economic nexus status

The economic nexus dashboard provides a centralized view of economic nexus status by state, supporting review and follow-up actions for entities with potential registration requirements.
A details panel is displayed on the dashboard. The panel summarizes entities by state that have one of the following statuses:
  • Exceeded Threshold
  • Approaching Threshold
  • Registering
Use the panel to identify states and entities that may require immediate review, registration follow-up, or other compliance action.
Hover over a state on the map to view a summary of entity counts by economic nexus status. The displayed information includes the number of entities in each status for that state. For example:
  • Virginia may display 1 entity with a Threshold Exceeded status and 1 entity with a Registered status.
  • Utah may display 2 entities with an Approaching Threshold status.
This information provides a quick view of economic nexus exposure and registration activity across tracked states.
To view Canadian economic nexus details, customers can use the country switcher in the upper-right corner of the page and select
Canada
 from the available United States and Canada options. Once Canada is selected, customers can view economic nexus tracking information for both federal and provincial jurisdictions. All other functionality including tracking, reviewing jurisdictional details, and managing relevant data remains the same as it does for the United States.

View transactions

The economic nexus dashboard provides customers with a high-level view of nexus activity from the detailed panel. Customers can quickly review the jurisdiction's nexus status, threshold limits, current revenue, transaction count, and percentage information.
For a more detailed view, customers can select
View Transactions
. This option opens the Transaction Summary page, where customers can review the transaction data used by OSU CoCounsel to calculate economic nexus results. The transaction summary page provides details by entity and state, and it covers:
  • Nexus status
  • Nexus threshold
  • Included sales
  • Excluded sales
  • Exempt sales treatment
  • Last import date
  • Horizon
Included and excluded sales are determined based on the authority's treatment of exempt sales. Some authorities exclude exempt sales when calculating economic nexus revenue. For those jurisdictions, Included sales reflect only the taxable portion of sales, while exempt sales are displayed under Excluded Sales.
The page also clearly identifies the horizon for each state. Examples include:
  • Preceding 12 months
  • Previous or current calendar year
  • Previous calendar year
  • Previous 12 months ending September 30
  • Previous 4 U.S.–New York fiscal quarters
Based on the selected lookback ending period, the system installs the corresponding transaction details in the grid. By default, the lookback ending period is set to the current effective period, consistent with the binder screens. To review data for a different timeframe, select the
Year
 and
Month
. The displayed information will update based on the selected period.
The transaction summary page shows aggregated transaction amounts and counts, organized by transaction month and tax type. This view helps customers quickly analyze transaction activity and understand the data contributing to economic nexus calculations.
From the transaction summary page, customers can further drill down into the underlying journal entries for additional transaction-level detail. To view journal information, customers can select
View journal
 from the
Actions
 column in the transaction grid. This opens the Journal table, where customers can review more detailed information about the transactions included in the selected summary record.

Review economic nexus by entity

The economic nexus dashboard can be viewed at the entity level instead of across all entities in a work area. To review nexus thresholds for a specific entity:
  1. On the Economic Nexus dashboard landing page, select
    Go to entity details
    .
  2. The entity-level Economic Nexus dashboard opens. This dashboard shows nexus information for each state for the selected entity only, rather than consolidated information for all entities in the workarea.
  3. Under entity profile, use the
    Select entity
     dropdown to select the entity to review.
The entity-level dashboard provides the same functionality as the work area level economic nexus dashboard, including reviewing nexus thresholds and managing registration and return-related actions.

View economic nexus thresholds in grid view

Economic nexus threshold details can be reviewed in a tabular grid view as an alternative to the map view. To access the grid view, select
All entities
 next to the
Entity Profile
. The grid displays economic nexus information across entities, including:
  • Entity
  • State
  • Nexus status
  • Sales amount
  • Transaction count
  • Horizon
For additional information about a specific entity and state, select
View details
 in the
Actions
 column. A details window opens with options to:
  • View transactions:
     View a summary of transactions by period and tax type.
  • Register with authority:
     Manage registration-related actions for the selected state.
All other functionalities for reviewing nexus thresholds and managing registration and return-related actions remain the same as in the workarea-level and entity-level Economic Nexus dashboards.
The grid view data can be exported to an Excel file for further review or analysis. Select the
Export
 option from the grid view to download the displayed economic nexus threshold data into an Excel spreadsheet.