What is Your Nexus Footprint?

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footprintA survey of product sellers by Sabrix found that 95% of all businesses (small, medium and large) had underestimated their nexus footprint. Out of 100 companies, 95 had it wrong.

Yesterday, we talked about the concept of nexus – your connection – to a state. The term us accountant-types like to use for that is nexus footprint.

Your business likely has more than one nexus footprint. Here are some common things that might create nexus for you:

    Hiring an employee
    Having a tradeshow
    Owning real or tangible personal property
    Having a sales function

boxesIn most of the above cases, you’ll just have nexus for sales tax purposes, not for income tax purposes. Although, that’s not always clear-cut either.

If you have a business that travels or that ships products or even sells digital downloads, then you need to pay special attention to where your nexus is.

Here are two resources to get you started:

sbsbbookSmart Business, Stupid Business

Pay special attention to Chapter 15, What State is Your Business In?

smallNexus Handbook Home Study Course

Tomorrow we talk about The Two Faces of Nexus.

Thursday: Colorado’s Dangerous New Tax Example

Friday: Nexus Solutions

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