In an era where most companies conduct business across state lines, many often don’t understand or adhere to the rules required to maintain sales and use tax compliance. Conducting business in multiple states means your company may be responsible for numerous tax obligations. Whether selling to customers, renting property, or hiring employees, the more business you do, the greater your chance of triggering nexus.
At Thompson Tax, we are fluent in nexus and taxability. We can help you in a multitude of ways, including conducting nexus studies and performing taxability research specific to your products and services. Let us help identify your nexus footprint so that we can work together to create a path toward compliance.
We are your trusted tax advisors!
Our Extensive Nexus Study & Taxability Analysis Services
Assess Nexus Exposure
There are more ways than one to generate sales and use tax nexus. For most clients, a major step toward compliance is fully understanding how, where, and when your company has met nexus. With our hands-on personal approach, Thompson Tax can help determine your sales and use tax exposure and recommend ways to minimize your risk. We begin with a thorough analysis of nexus-creating activities found in the following categories:
- Physical nexus
- Economic nexus
- Affiliate nexus
- Click-through nexus
- Marketplace nexus
Clarify Evolving Legislative Definitions
Each state has different legislative definitions that determine whether your products and services are subject to sales and use taxes. These definitions are constantly evolving and taxability can quickly become overwhelming as your business grows. As your trusted sales and tax use advisors, we can sift through the legislative muck to determine how these taxes may apply to your business.
When did physical Nexus and economic Nexus come into play?
In 1992, the North Dakota Quill case established physical nexus definitions. It was the catalyst for allowing states to require companies with a physical presence to register and collect state sales tax.
In June 2018, the South Dakota Wayfair case was decided, paving the way for states to draft economic nexus rules.
What is considered physical Nexus?
Physical nexus is a minimum connection to a state or jurisdiction with a physical presence. This could include an office, an employee, a warehouse, etc. (even attendance at trade shows and third-party sales representatives can count as physical nexus).
What is economic Nexus?
Economic Nexus means a minimum connection to a state via sales volume.
Generally, that threshold is met by reaching a set sales or gross receipts level within a state or jurisdiction (i.e., $100,000.00 in sales or 200 transactions). Each jurisdiction has its own set of rules, so knowing the threshold for each is key to helping determine the company’s registration and filing requirements.
I’m a remote seller; how does Nexus apply to me?
Multiple avenues can lead you to meet Nexus as a remote seller within a particular state or jurisdiction. Affiliate, click-through, marketplace, and economic nexus are all possible scenarios for remote sellers.
As your nexus expert, let us help you determine where you should register and collect and what states you should watch closely as your sales increase.
Where must I collect and remit sales and use taxes?
In any state or jurisdiction where you have met the nexus requirements, you must collect and remit sales and use taxes.
As your nexus experts, let us help you determine where to register and collect by completing a nexus questionnaire that will allow us to analyze your risks.
I am an international seller; do I need to register and remit U.S. sales and use tax?
Once economic nexus thresholds are met in any given state, international sellers must also be registered to collect and remit various sales and use taxes.
I am a U.S. seller wanting to begin selling internationally. Do I need to register for any Value Added Taxes (VAT)?
U.S. sellers can be required to collect and register for VAT. We will work with our global resources to help determine whether your company needs to register for and remit any international taxes.
I am a U.S. seller who wants to expand into Canada. Do I need to register and remit Canadian Goods and Services Taxes (GST)?
U.S. sellers can be required to collect and register for GST. We will work with our Canadian resources to help determine whether your company needs to register and remit any Canadian taxes.
Your Nexus Experts
With so many sales tax nexus experts in the market, why should you consider Thompson Tax?
- We are dedicated to seeing your business become sales and use tax compliant. The dedicated analysts at Thompson Tax have an expert-level understanding of the ins and outs of nexus and what can lead a company to sales and use tax exposure. We want you to succeed and will offer you expert guidance on minimizing your risk.
- We offer tailored services. That means our clients are treated as individuals, not just as numbers. We execute your nexus analysis, examine exposure, and keep abreast of how state tax law changes may affect your specific business.
Now is the time to consider lifting the burden from your internal tax department. Contact Thompson Tax today!