Crossing state lines brings tax risks, rewards
Abstract: With the advent of e-commerce and a vast array of national distribution networks available, taking wares across state lines has never been easier. But if its business activities in another state reach the point of nexus, a company could face interstate tax issues for which it’s not completely prepared. “Nexus” is the term states use to indicate that a company’s business presence in their territory is substantial enough to subject it to their tax rules and obligations. This article explains what creates nexus and the kinds of taxes that may result. But it also shows where a company can find information about its actual or potential nexus obligations and how those might work to a company’s advantage. A sidebar discusses Internet sales tax obligations.