- A nexus study identifies where a business has sales tax obligations.
- It helps businesses understand and comply with sales tax requirements across different states.
- Nexus can be created through physical presence, economic activity, click-through partnerships, or affiliate relationships.
- The study is crucial for avoiding audits and penalties by ensuring compliance with state tax laws.
- The 2018 South Dakota v. Wayfair ruling expanded the scope of economic nexus, making such studies more important.
- Businesses should assess if they exceed nexus thresholds, have physical presence, or engage in activities that create nexus.
- Conducting a nexus study can prevent unexpected tax obligations and reduce audit risks.
Source: taxually.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.
