By • Jul 2, 2018 This post has been updated to reflect changes based on the South Dakota v. Wayfair Supreme Court case ruling on June 21, 2018 The word nexus is a Latin, meaning to bind, join or tie. Since ancient Roman times, it has evolved to mean “a connected series or group.” Nice word, right? Sounds very friendly.
Transfer encoding base64. That is unless you’re an online seller. When online sellers see the word “nexus” all they can often think about is “sales tax nexus” – something which binds up all your energy, makes you join your palm to your forehead, and ties you to your spreadsheets and tax tables as you try to keep up with sales tax compliance! But never fear, if you find the concept of sales tax nexus confusing, we’ve got your back. What is sales tax nexus?
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Sales tax nexus occurs when your business has some kind of connection to a state. All states have a slightly different definition of nexus, but most of the time states consider that a “physical presence” or “economic connection” creates nexus. Physical presence can mean a number of things, including: • Having an office • Having an employee • Having a warehouse • Having an • Storing inventory • – Making a certain amount of sales in a state (either a certain dollar amount or a certain number of transactions) • Temporarily doing physical business in a state for a limited amount of time, such as at a trade show or craft fair If you suspect you might have sales tax nexus in a state, you could to determine whether or not you have sales tax nexus. What happens if I have sales tax nexus? If you have sales tax nexus in a state, then you must collect sales tax from buyers in that state.
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