Got Nexus? Find Out Before Operating in Multiple States

For many years, business owners had to ask themselves one question when it came to facing taxation in another state: Do we have “nexus”? This term indicates a business presence in a given state that’s substantial enough to trigger the state’s tax rules and obligations.

Well, the question still stands. And if you’re considering operating your business in multiple states, or are already doing so, it’s worth reviewing the concept of nexus and its tax impact on your company.

Common Criteria

• Employing workers, independent contractors, or agents in the state
• Owning or leasing property there
• Marketing your products or services in the state
• Maintaining inventory there
• Having a certain amount of sales into a state

Strategic Moves

As with many tax issues, the totality of facts and circumstances will determine whether you have nexus in a state. The tax impact could be significant, and a review of a state’s laws and regulations must be analyzed to determine the impact.

For starters, strongly consider conducting a nexus study. This is a systematic approach to identifying the out-of-state taxes to which your business activities may expose you as you expand your multistate activity. Contact Weaver today to have us conduct your nexus study, or download our new Nexus Trends Insights document to learn more about the legal and practical nexus concerns.