As the continual fight for revenue presses on, states are looking for additional sources of revenue. With the changing business landscape throughout the country, business is largely being conducted remotely and, as a result, the notion of physical presence to be considered doing business in a state and establishing nexus is being overwritten to match the nature of today’s business environment.
With the passage of the Wayfair legislation heightening this concept for sales tax purposes; many states are moving toward economic nexus requirements meaning you may have a state filing requirement for income, sales, or both even if you haven’t physically been present within the state itself. If you haven’t discussed nexus and where you may be doing business, now would be a good time to get a jump on understanding your compliance obligations.
In other state news, if you have a presence within the states of WI, OK, CT, LA, or RI, you could make an election to be taxed at the entity level. This may assist in those pass-through owners being able to mitigate the $10,000 state and local tax limitation on their individual tax returns.
For more information contact Julie Helms – Director of Specialty Tax Services or your Lurie trusted advisor.