Nexus
The Supreme Court overturned its decision that required businesses to have physical presence
in a state before the state could require them to collect and remit sales tax on purchases by customers within the jurisdiction.
This decision is the most significant state tax case in the past 25 years and raises new and fundamental issues.
The U.S. Supreme Court held that states can assert nexus for sales and use tax purposes without requiring a seller’s physical presence in the state.
South Dakota is challenging, and attempting to have overturned, the physical presence nexus standard for the collection of sales and use taxes.
The Supreme Court heard oral arguments in a case with broad remote sales tax collection ramifications.
Three recent cases serve as a tool for taxpayers seeking guidance on when an out-of-state corporation owning a passive ownership interest in a passthrough entity doing business in New Jersey might be found to have nexus.
This column discusses the definition of “benefits received” under the regulation for sourcing service receipts.
States are attempting to increase revenues by enacting laws that expand the definition of nexus-creating activities.
States have gotten creative and taken matters into their own hands in an attempt to collect lost tax revenue.
This column discusses compliance considerations, including nexus, taxability, and how to source
the revenues from customers.
Non-U.S. taxpayers generally are surprised by the degree of complexity involved in complying with U.S. state and local taxes.
Foreign entities not engaged in a U.S. trade or business, not deemed to have a permanent establishment, or that have claimed a federal treaty exemption may still be subject to state and local income taxes.
This item discusses how foreign corporations that generate income from intangible assets are affected by the economic nexus rules as well as the water’s-edge rules.
The combination of factor presence nexus
standards and market-based sourcing of services for sales factor purposes can have a particularly significant impact on multistate service providers.
Stress points that often produce significant difficulties include apportionment issues stemming from the mixed entity and aggregate treatment of flowthrough entities, the attribution of nexus up and down tiered flowthrough structures, and the impact on individual owners of residency rules and unusable credits for taxes paid to other states.
The court held that the law does not discriminate against out-of-state retailers.
State courts have supported the economic nexus theory, which does not require a business to actually conduct activities within the state to incur an income tax obligation.
The court determined that two SPEs related to Harley-Davidson Inc., with no physical presence
in California, established nexus under Due Process and Commerce Clauses of the U.S. Constitution.
Economic nexus provisions, which often target financial institutions, vary considerably from state to state, and they can trigger income or franchise tax filing responsibilities of which taxpayers are often unaware.
Many not-for-profits do not know that the states in which they conduct business have many rules that may apply to them.
