What is tax nexus?
Answer: : Nexus is the
determination that a company has sufficient “connection” to
the state to allow taxation. This connection is primarily based on three
factors:
- Offices or assets in the state
- Employees or payroll in the state
- Sales in the state
Normally, if a Company has offices and assets
or employees payroll in a state, the “connection” is
established. However, sales in a state, by itself, do not rise
to the “connection” level.
One of the other two factors must be present to qualify.
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