Where Do You Have Sales Tax Nexus?
Understanding where your company has sales tax nexus is the first step in the sales tax compliance journey. The experts at PMBA conduct a deep-dive analysis to help you understand where, when, and how you create physical or economic nexus, as well as review possible risks and strategies to improve your sales tax compliance process.
Comprehensive Nexus Study Services
Completing business across state lines can often trigger tax obligations. Understanding and complying with these requirements are critical for compliance. Unfortunately, it isn’t always clear when your company may have a responsibility.
Cross border transactions take many forms, from making sales to customers, hiring employees, or renting property. Whether any of these transactions create a tax obligation hinges on the concept of nexus.
Nexus occurs when a company has sufficient connection with a state to allow the taxing authority to impose a tax. To help you remain compliant and avoid unknown tax liabilities,
PMBA experts will conduct a nexus analysis or study to review your business activities and identify when and where nexus was created.
What Is a Nexus Study?
A nexus study analyzes every aspect of your business activities to determine if and why nexus is created.
These studies can shed new light on your business’s tax requirements and help you discover ways to avoid costly tax penalties.
During a study, the team also examines all applicable tax laws and regulations to determine your tax obligations.
Key Contacts
Eric Carrasco
Manager of Indirect Tax
Questions? Contact Us
Working with state & local tax experts equips you with all the information and expert guidance necessary to:
Understand your unique reporting requirements
Every state is different; a nexus study reveals which taxes apply to your unique business and explains why they pertain to you.
Remain compliant and avoid harsh penalties
If the state determines you failed to pay the appropriate taxes, you could be subject to penalties and interest that can go back many years.
Plan for the future
Understanding your company’s tax obligations allows you to make more informed decisions throughout the year.
When Should a Business Conduct a Nexus Study?
A nexus study is valuable for new and established businesses alike. Laws change, and business activities evolve and develop. So even if you’ve completed a nexus study in the past, an updated analysis can reveal whether you’re still compliant.
Some of the common activities that trigger nexus include:
- Creating a physical presence in the state, such as establishing an office or renting a warehouse
- Selling products or services from an out-of-state location to customers in-state
- Hiring remote employees
With these activities in mind, a nexus study is essential for businesses that are:
- Expanding into new markets
- Making sales in new states
- Launching new products and services
- Moving or expanding an international business into the U.S.
- Acquiring new companies
- Looking to become compliant after receiving a penalty
Related Resources
-
VideosLearn More
-
VideosLearn More
-
FAQsLearn More
