If this is the first economic nexus analysis that you’re performing for a business, we recommend going back to 1/1/2017. This will help ensure an accurate snapshot of when the company met or surpassed economic nexus thresholds.
Why? The South Dakota v. Wayfair decision took place on June 21, 2018. At that time, some states had already enacted legislation and put enforcement on hold pending the decision. Other states quickly passed legislation after the decision and established a prior calendar year lookback period.
Effectively, any state that passed legislation in 2018 with a prior calendar year lookback period necessitated that threshold tests include transactions dating back to January 1, 2017.
If the taxpayer started their business after 01/01/2017, we recommend going back to the date of the first transaction.