How Has Nexus Been Applied Previously?

February 27, 2020

Legal precedent has been set when it comes to out-of-state or online sales for tax purposes.


Gary Bingel: So almost immediately after the Quill decision, states really didn't like this physical presence requirement. So what they did is they started to attack it almost immediately once it came out. They started enacting very aggressive legislation and over the years it was found that you could have physical presence through things like intangibles, through agents, through affiliates and really any sort of minimal connection that people may not think of as physical presence was nevertheless found to be sufficient to establish physical presence for purposes of Nexus and the sales tax and income tax area.

In very recent year, states became even more aggressive instituting things such as cookies access and reporting requirements under which you could have essentially economic Nexus through things like just putting cookies on someone's computer in the state or just having a minimal amount, $10,000, of sales in the state could subject you to very onerous reporting requirements in the state for sales tax purposes. And then what they would do is the state would give you the option of, instead of adhering to those reporting requirements, they would allow you to actually collect and remit the sales tax. So it really just became a backdoor way of states getting you to collect and remit sales tax that they felt was due anyway.

Have Questions or Comments?

If you have any questions, we'd like to hear from you.

More in This Series

How Does Wayfair Impact Companies?

You need to understand the concept of Nexus if you are selling over the internet.

What Has Changed About Nexus and Wayfair?

When you sell over the internet you need to understand the concept of nexus. Because of sales across state lines sales tax must be collected.

What is the Future of Nexus?

Save you a lot of time, grief and money by knowing your Nexus tax exposure. You need to consider not just your sales tax footprint, but where you're filing things such as income taxes and franchise taxes as well.

How Should Companies Manage Wayfair Changes?

A discussion on how companies should manage Wayfair changes including understanding their Nexus footprint, sales tax and your revenue streams and the taxability of them.

Risks of Apportionment

Apportionment issues present challenges and opportunities. Proper planning can help to manage your overall tax liabilities, and knowledge of these issues can help mitigate potential exposures and combat aggressive taxing authorities on audit.

Apportionment Opportunities

In this Apportionment overview, Gary Bingel discusses challenges and opportunities and how planning can help manage overall tax liabilities, and knowledge can help mitigate potential exposures and combat aggressive taxing authorities on audit.

What is Apportionment?

Apportionment is the manner in which income is divided between various taxing jurisdictions. A number of states have moved to receipts receiving more emphasis. Our video overview sets the stage for our pitfalls, risks and opportunities discussions.

What is Nexus?

In this Nexus overview, Gary Bingel discusses how Nexus varies state by state, the contacts required to generate taxes, "physical presence" and other key focus areas including remote employees, and new sourcing rules among others.