Arizona Court Reverses Ruling: Third-Party Fulfillment Centers Create Sales Tax Nexus

• Arizona Court of Appeals reversed a lower court ruling regarding physical presence nexus
• Businesses need to be aware of in-state activities by independent contractors for sales tax nexus
• RockAuto, an online auto parts retailer, disputed Arizona Department of Revenue’s assessment of sales tax
• RockAuto contracted with in-state suppliers to fulfill customer orders
• Court of Appeals found that suppliers’ activities created physical presence nexus for RockAuto
• Tax Court and Court of Appeals applied the same nexus principle
• RockAuto employees visited Arizona to meet with suppliers and strengthen relationships

Source: aprio.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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