Sales Tax Nexus Determination
Sales tax nexus represents a physical connection between an out-of-state company and a particular taxing jurisdiction that allows the taxing jurisdiction to subject the out-of-state company to their taxing rules.
Having a physical office or an employee based in a particular state is a clear-cut example. However, there are more subtle activities that could also trigger nexus that could represent risk to your business:
- Employees or contractors traveling into another state where they are not based to solicit sales
- Employees attending trade shows
- Service technicians traveling into another state where they are not based to perform service calls
- An affiliate or agent relationship that supports selling or servicing activities