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Should Your Business be Filing in Other States?

What is Nexus? Nexus is a type of connection with a state or a type of factor presence within a state. This physical, economic or factor presence, or registration, allows someone to do business within a state.

Nexus is required for a state to enforce an income, franchise, or gross receipts tax on a taxpayer or require a taxpayer to collect and remit sales and use taxes. Income and sales tax nexus is defined differently by each state, but they also have many of the same requirements.

It has been almost three years since the historic South Dakota v. Wayfair, Inc. when the Supreme Court upheld South Dakota’s economic nexus law and overruled the Court’s physical-presence precedents. Implementing these new sales tax-related nexus rules has challenged states regarding remote internet sellers. Traditionally, sellers were identified by physical identity or connection within the state.

Please take a moment to click here to read more about this topic. Do you think you are at risk for non-reporting in another state? Call one of our tax professionals at 828-327-2727 for further details.

Source: Journal of Accountancy and JD Supra