Navigating Sales and Use Tax Nexus: Physical vs. Economic Criteria for Compliance and Operations

• Nexus refers to the connection between a business and a state that justifies tax obligations
• Physical nexus is based on tangible presence in a state, such as office locations, employees, inventory, property, and sales representatives
• Economic nexus is based on economic activity within a state, regardless of physical presence
• Economic nexus criteria include sales revenue thresholds and transaction volume thresholds
• Companies must understand state-specific regulations, use technology and software, and conduct regular audits to meet nexus obligations

Source: taxconnections.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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