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Sales Tax Nexus

Nexus is a constantly evolving concept, as states (over time) write new rules or reinterpret existing law.

The word nexus refers to a connection between a person and a taxing jurisdiction that is deemed sufficient to allow the jurisdiction to impose a tax.

First of all, sales tax nexus is the basis for all sales tax discussions.

Without sales tax nexus, a business has no further concern from a sales tax perspective. In this context, in its simplest definition, nexus is a physical connection between a state and a business that enables a state to subject that business to its sales tax laws. The connection has to be “substantial” and that’s where the problem arises. “Substantial” is generally left to interpretation and is rarely clearly defined.

If you are part of Tax implementaion, don;t get surprise with this term if you came across while discussing with Tax department.

You can get more insights here [1]

[Adopted from Internet]