Out on the border – Avoiding multistate taxation missteps
Abstract: For construction companies, crossing state lines for a project can boost the bottom line, but it can also mean dealing with new and complex tax issues. When determining a contractor’s tax eligibility, governments consider whether the company has “nexus” in their respective states, meaning that its presence there is significant enough to subject it to taxes. This article explains what activities trigger nexus, how states determine the amount of income tax owed, and what other taxes might be incurred. A sidebar discusses the usefulness of a nexus study to help answer such questions in advance.