Nexus — the minimum amount of contact between a taxpayer and a state that allows the state to tax the business on its activities — is under attack by the states as they seek to broaden its reach in order to increase their taxing revenue. MWE’s Tax Director Joseph Pizzimenti, Esq. spoke with Accounting Today about this issue and the fine distinctions between pure economic nexus and factor-based nexus.
There’s not that much difference between pure economic nexus and factor-based nexus, according to Joe Pizzimenti, tax director at Top 100 Firm Margolin, Winer & Evens LLP. “If a company does not have P.L. 86-272 protection in order to determine the requisite presence, instead of looking for physical presence or other form of agency presence, you look to an objective test. If you have, say, $1 million of sales in the state, or some other number they determine legislatively, you are deemed to have economic nexus in the state.” Read more>>