Nexus
Nexus, a connection between a business and the state, must exist for a state to impose an income tax. States establish the rules to use when determining how much in-state activity creates a nexus by a business. Often, this tax is based on a company’s net income, though there are exceptions, such as gross receipts and net worth taxes.
Each state has the power to define its income nexus in a different way. While each state is unique, there are some commonalities in what they require. In each state where you do business, you must consider if you have a physical presence there. Then check if the state has an economic income nexus and if you meet the thresholds.
Physical Nexus
The primary criteria for income tax nexus is a physical Read More