The legal trigger that requires you to collect sales tax in a state. Physical presence creates nexus; so does exceeding the state's economic threshold.
Nexus is the legal connection between your business and a state that requires you to register, collect, and remit sales tax there. Before 2018, only physical presence (office, employee, warehouse, inventory in a 3PL, trade show booth over N days) triggered nexus.
After the 2018 South Dakota v. Wayfair Supreme Court case, all 45 states with sales tax added "economic nexus" thresholds — typically $100,000 in sales OR 200 transactions into the state in a calendar year. Cross either threshold and you must register, collect, and remit.
Physical nexus
Storing inventory in an Amazon FBA warehouse in Kentucky = nexus in Kentucky
Economic nexus
California threshold is $500k. 210 orders into CA: no economic nexus yet. $550k: yes.
1992 Quill v. North Dakota held that physical presence was required for a state to force a mail-order seller to collect. E-commerce growth made this untenable, and Wayfair overturned Quill in 2018.