"Amazon" Nexus Is Spreading Like Wildfire
As expected, more states are following in New York's, North Carolina's and Rhode Island's footsteps.
These bills have their differences, but they are also very similar. The following is a sample of some of the language included in the bills:
A person with no physical presence in the state is presumed to be engaging in business in the state if:
- that person enters into an agreement with an in-state resident under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by link or an Internet web site, to that person; and
- the cumulative gross receipts from sales by that person attributable to referred customers by all residents with such an agreement are greater than $10,000 during the preceding 12-month period.
The nexus presumption would be rebuttable by proof that the resident made no solicitation in the state that would satisfy U.S. constitutional nexus requirements on behalf of the person presumed to be engaging in business in the state.
If you are selling goods over the Internet or through an affiliate program, these bills, if enacted, may affect your tax obligations in the states mentioned above.
If you are in need of representation regarding "Amazon" nexus or other nexus issues, please contact me at firstname.lastname@example.org.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at email@example.com.
Because state and local taxes are deceptively simple and endlessly complicated.