Sales Tax Nexus Determination
Common business activities can create sales tax nexus
Ever since the Congress gave the federal government the right to "regulate commerce...among the several states", the notion of sales tax nexus and substantial presence has been an issue.
Sale tax nexus represents a physical connection between an out-of-state company and a particular taxing jurisdiction which makes the out-of-state company responsible for collecting and remitting sales tax on their transactions. Having a physical office or an employee based in a particular state is a clear-cut example of nexus. However, there are many more subtle activities that could also trigger nexus that could represent risk to your business:
Sales reps 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
Read more about our thoughts on sales tax nexus here:
- Affiliate Sales Tax Nexus 1
- Affiliate Sales Tax Nexus 2
- Sales Tax Nexus and Direct Marketers
- Sales Tax Nexus and VoIP Providers
TaxConnex helps you identify the relevant sales tax nexus creating activities and determine where you have an obligation to collect and remit sales tax. Where we determine you have nexus, we will recommend simple, proactive steps based upon your risk quotient to remedy any potential exposure.