How a Color Coded Map of the US Can Reduce Sales Tax Nexus

I’m working on an interesting project focused on sales tax nexus.  This project is a bit unusual.  Typically, sales tax nexus issues are not addressed proactively.  A company will often come to me after an audit or after they receive a sales tax nexus questionnaire.  In most situations, there’s already a known issue and the company is trying to quantify their level of exposure.  It’s somewhat rare when a company proactively looks to address a potential sales tax nexus issue.  The company I’m working with is based in Illinois and sells a certain piece of computer hardware.  They frequently market this piece of hardware at trade shows although they do not sign sales contracts at the trade shows.

This client asked us to create for them a color-coded map of the United States using red, yellow, and green.  This map will be used to help identify the consequences of traveling into a particular state – predominantly in the role of attending or presenting at a trade show.  Red represents those states that should never have a company representative set foot in them else it will create sales tax nexus.  Yellow represents the potential to create sales tax nexus based on a certain number of visits.  Green represents those states where travel into the state for purposes of attending a trade show would not trigger sales tax nexus.

A fairly basic tool but one that will help this company steer clear of some potential hot water.