Changing Times, Changing Taxes!
The technology age has brought upon new situations where the government decides it deserves a piece of the pie, whether that sounds fair or not is up for debate, nevertheless the government realized that the internet is a market for the Internal Revenue Service (IRS). Now, 45 states and thousands of localities impose sales and use tax. However, the digital age has brought upon the “Amazon,” or “Remote-Seller,” or Nexus Rules. That is where the Nexus Studies offered by STS Consultants will come into play, to help save your company money.
Lets divulge more about what the Nexus rules are:
Why was the Nexus created?
- Nexus, also known as sufficient physical presence, is the main determining factor of whether an out-of-state business selling products into a state is responsible for collecting sales or use tax on sales into the state. One must have Nexus before a taxing jurisdiction can impose its taxes on an entity.
- Nexus is created if your company establishes a temporary or permanent presence of people (employees, service people or independent sales/service agents) or property (inventory, offices, warehouses). Temporary presence is created by traveling people visiting states to call on customers or prospects, trade show attendance, or consigned inventory in warehouses.
- Nexus is imposed once a substantial physical presence is established. Regrettably, this physical presence is not clearly defined by each state and can vary from 1 day to a number of days in other states. The allotted number of days that can create nexus can also vary based on the bustle performed in the state. Nexus means a business entity has established a direct or representational presence within a particular state or jurisdiction. This presence gives the state the right to require a company to pay or collect and remit certain taxes.