Do you have a website? If so, there is one thing you need to find out now. Where is your website hosted? I’m not talking about what company, I’m talking about what state. That is because as of right now, 17 states say that if you have a website hosted in their state, you have nexus.
And nexus means tax.
In this case, the nexus is income tax nexus, which is generally the highest standard. So if you have income tax nexus in that state you have to file a state income tax return there. Plus, you probably have sales tax nexus. That means every sale you make in that state needs sales tax paid if the sale would be subject to sales tax.
The 17 states are:
District of Columbia
Delaware has a gross receipts tax, which is their tricky legislative way around sales tax. But in Delaware’s case they are assessing the gross receipts tax on services too.
And Oregon income tax means one of the country’s highest tax rate. You don’t want to get part of your sales attributed to Oregon.
If you have a website, find out where it is hosted today. If you’re in one of the 17 states (and you don’t otherwise have nexus there), you might want to consider moving.
At USTaxAid, we’re looking at alternatives right now. We’re not in one of the 17 states, but with all the state tax law changes, we’re exploring moving our hosting offshore.
Where is your website hosted?