What Is a Nexus Determination?
Nexus means connection, and with regard to tax laws, a nexus determination defines the relationship between the business and the taxing authority (usually the state). If you have a business in California and a second location in Florida, it’s easy to see what the nexus determination would be.
Unfortunately, not every nexus determination is so simple. Many factors can go into a nexus determination. For instance, if you have employees who live in other states, this may count as having a nexus in those states. If you use a third-party shipper in another state, that may count as well. But it may not, and that is why nexus determinations are notoriously complex.
Understandably, nexus determination can strike fear into the hearts of business owners across the U.S. because the determination is so important, but also so difficult. When you attempt to learn about the concept on your own, you may come across this definition: “Nexus determination is primarily controlled by the U.S. Constitution, in which the due process clause requires a definite link or minimal connection between a state and the entity it wants to tax, and the commerce clause requires substantial presence.”
If this definition does not help you understand nexus determination, we don’t blame you. At SalesTaxSolutions.US, the professionals who provide nexus help have more than 20 years of experience in federal and state tax and accounting laws. We understand that small and medium businesses don’t always have the funds to keep an accountant on staff, so we offer our services on an a la carte basis, making us more affordable to you.
When you work with SalesTaxSolutions.US, we will examine your records and business model to determine whether you are required to collect sales and/or use tax in particular jurisdictions across the nation. A lot goes into these determinations, and it’s important to use a service with experience that you trust.
Additionally, we assist our clients with sales tax registration. When you sell items to items in other states, you must register in those states to pay sales taxes. The sales tax registration process in each state is different, and it can be confusing and time-consuming. Our clients depend on us to take care of sales tax registration for them.
Errors with Nexus Determinations
Errors with Nexus Determinations
Making a mistake with nexus determination can be costly. Further, depending on whom you use for your business tax returns, the mistakes may not be discovered for years. This can create a situation in which you owe thousands of dollars in taxes, plus thousands more in penalties and late fees.
Be sure you’re doing business and paying your taxes correctly — rely on SalesTaxSolutions.US for nexus help.
Our Nexus Determination Process
Simple, fast, and convenient.
Register and File
Economic Nexus Review
Each jurisdiction has different laws when it comes to what business activity or sales volume creates an economic nexus. We’ll review your sales activity for each jurisdiction to determine where you have met the economic thresholds.
The most common threshold is $100,000 of sales or 100 transactions into the state within one calendar year.
Physical Nexus Review
Another way to establish nexus in a state or locality is by having a physical presence there. A physical presence is defined differently in each locality, but in general the following will create a physcial nexus: warehouses, inventory, employees, and office locations.
After reviewing both your physical and economic nexus factors, we’ll align the findings with each jurisdictions laws and definitions of nexus. With this, we’ll determine which jurisdictions your business has nexus and therefore which you need to register to collect and remit sales tax.
Register and File!
After determining which states/localities your company should register in then we may assist with the registration and filing process. At this point you will determine a proper start date to start collecting and remitting sales tax. Then we will move forward with registering for the tax accounts and filing the returns.
Here are some answers to Frequently Asked Questions.
What is the filing deadline?
Each jurisdiction has different deadlines. Some returns are due monthly, quarterly, semi-annualy, or annually.
Can I get an extension?
Some states do offer extensions for returns, but not all. Depending on your situation you may qualify for an installment plan.
What if I don't know where I need to file?
We can help you figure it out. Send us a message or give us a call to get started.
I received a delinquency notice from a state. What should I do?
Depending on the notice, you may need to file back returns with that state. We offer notice handling services, contact us to get started.
What if I don't want to eFile my returns?
Most states require electronic filing now. It is the most convenient and fastest way to file.
Can I file my return myself?
Our services are offered individually so you may choose to have us complete a nexus determination and register accounts, but not file returns. That is ultimately up to you. We understand each business has different resources and business needs. We’ll work with you to create a custom plan to meet those needs.
What do I need to get started?
To get started you will need to send us a message detailing your business needs. After that, your tax preparer will walk you through the next steps.
Can I setup a meeting with my tax preparer?
Absolutely! Meetings are included with our services. We can do video meetings or phone calls, whichever is most convenient to you.
Contact us to create your custom plan