- Companies must understand both economic and physical sales and use tax nexus to ensure compliance and streamline business operations
- Nexus refers to the connection between a business and a state that justifies tax obligations
- Physical nexus is established through tangible presence in a state, while economic nexus is based on economic activity regardless of physical presence
- Economic nexus criteria include sales revenue thresholds and transaction volume thresholds
- Companies can meet nexus obligations by understanding state-specific regulations, utilizing technology and software, and conducting regular audits and reviews.
Source: thompsontax.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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