Nex What?!?!

The Key to Tax Compliance Lies in Nexus

When it comes to tax compliance, nexus is the key to everything you do.

Nexus is defined as the obligation to collect and remit tax where business is conducted. However, there is a range of ways nexus is created, the rules vary state by state, and many companies aren't even aware of all of the possible triggers because they're constantly changing as sales tax legislation continues to evolve.

Many businesses assume they are only required to collect and file sales and use tax and manage exemption certificates in the state where their business is located. Unfortunately, that assumption usually results in hefty penalties in an audit.

To begin, almost every business has to calculate, collect, report and remit some kind of transaction tax, whether it be sales tax, seller’s use tax, exemption certificates... More than likely, you are already paying taxes in your state and local jurisdictions as a result of business location. However, what happens when you sell something across state lines? Are you required to collect sales tax and how much? And to whom do you remit the tax? Nexus rules are established by individual states and every state defines them uniquely. Determining exactly how a rule applies to a business is critical.

Making the nexus determination on your own is difficult, confusing and can lead to problems further down the road. Once you have determined where Nexus exists for your business, you are required to calculate, collect, report and remit that state’s sales tax each and every time you make a transaction.

Take the first step to end-to-end tax compliance by reading the free whitepaper, “How Sales Tax Nexus Affects Your Business” and discover where you might have unknown tax obligations. It covers nexus-creating activities such as:

• Having a remote/ traveling sales
• Leasing property
• Selling online, using online affiliates, or drop shipping