Substantial nexus

Definition
A state can only require a seller to collect sales tax on the sale of goods if that seller has a substantial nexus to the state. Generally, substantial nexus means physical presence. Out-of-state businesses without substantial nexus in the taxing state are not required to collect state and local sales taxes on transactions involving customers in the state. The residence of the purchaser is not a sufficient nexus. However, the U.S. Supreme Court has held that Congress, under its power to regulate interstate commerce, could grant authority to the states to require a seller to collect use taxes.