Nexus: Understanding Your Income/Franchise Tax and Sales/Use Tax Filing Obligations (Currently Unavailable)

Author: Michael Bannasch

Nexus is a fundamental concept in the state tax world, but it is also controversial and ever-changing. Why do certain activities create nexus while others don’t? Does physical presence nexus still have any relevance after the U.S. Supreme Court’s Wayfair ruling? What should you know about nexus as a helpful tax-saving concept, not just one that means a company is taxed in more and more jurisdictions? This course will help you understand the fundamentals and relevance of nexus, and will provide practical information you can use with your clients or your company.

Publication Date: January 2019

Designed For
CPAs in public practice or in industry who are responsible for state tax matters for clients or companies that operate in more than one state.

Topics Covered

• Historical development of nexus standards
• Income/franchise tax physical presence nexus, P.L. 86”272 and economic nexus
• Sales/use tax economic and physical presence nexus
• Application of nexus standards to the Internet economy
• The impact of Wayfair on nexus determinations for all taxes

Learning Objectives

• Recognize the conditions that create nexus and tax filing obligations
• Identify the potential value of nexus creation outside a company's home state
• Recognize and apply the protections of Public Law 86-272 to minimize net income tax exposure
• Differentiate the history of Nexus and how it applies
• Recognize what requires there be minimum contacts with a state before a business can be taxed in that state
• Identify which type of nexus pertains to the exploitation of the state's market, with respect to income and franchise tax nexus
• Describe the amount most common factor presence nexus threshold for sales, as established by MTC
• Differentiate correct statements regarding the implementation of Wayfair thresholds
• Recognize which state only requires $10,000 in sales to trigger nexus, with respect to sales and use tax
• Differentiate Supreme Court case rulings and how they apply to various scenarios
• Identify which state found the commercial activity tax's factor presence nexus standard to be constitutional, with respect to income and franchise tax nexus
• Recognize which state which does not claim to have trailing nexus

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None