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Economic Nexus Standards in State Taxation

Understand emerging trends in this area and why merely having customers in states with new economic nexus statutes could subject you to new business tax liabilities.

Do you or your clients sell online? Then it is imperative that you understand new business tax liabilities in terms of nexus. A state's ability to impose taxes on a multistate business has historically been limited by nexus standards rooted in the U.S. Constitution. In 2018, the U.S. Supreme Court, in South Dakota v. Wayfair, overturned its long standing rule in Quill Corp. v. North Dakota, that nexus, for state use tax collection purposes, requires some form of physical presence in the taxing state. In today's economy, states are continuing to push nexus limits farther than ever before and are now clearly reaching beyond traditional notions of nexus by relying on economic connections to create nexus. Is merely having customers in a state or generating income from a state enough to create tax obligations? Explore the concept of economic nexus and update of recent judicial and legislative developments. Understand emerging trends in this area and why merely having customers in states with new economic nexus statutes could subject you to new business tax liabilities. Learn how to handle nexus inquiries and which states to look out for in terms of nexus planning. This is a must for any business that sells to or generates receipts from customers in states where they otherwise have no other connections.

Runtime: 104 minutes

Learn Some of Today's Unanswered Nexus Questions

  • What, if any, level of physical presence falls short of establishing substantial nexus?
  • Is the bright line test a safe harbor or minimum threshold?
  • Who has the burden of proof (state or taxpayer)?
  • How long does nexus last?
  • Different Standard Based on Type of Tax (Sales Tax, Franchise Tax, Gross Receipts Taxes, Income-Based Taxes)?

Get Updates on the Federal Legisaltive Efforts

March 2015 – The Marketplace Fairness Act of 2015 (S. 698) - federal legislation pending that would allow SSUTA members to impose collection requirements on remote vendors as well as nonmember states that conformed to specific requirements only if the remote vendor has gross annual receipts in total remote sales in the United States in the preceding calendar year exceeding $1 million

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Why Lorman?

Over 32 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Overview

  • Due Process and Commerce Clause Nexus - the General Rule
  • U.S. Supreme Court Authority - What Is Substantial Nexus?
  • Impact of South Dakota v. Wayfair
  • Impact of Elimination of Quill's Physical Presence Test
  • Different Standard Based on Type of Tax? (Sales Tax, Franchise Tax, Gross Receipts Taxes, Income-Based Taxes)
  • P.L. 86-272 Imposes Additional Restrictions in Addition to Commerce Clause Issue
  • Does Merely Having Customers in a State or Generating Income From a State Create Tax Nexus?
  • Impact of Wayfair on International Transactions

Discussion of Recent and Pending Cases Impacting Out-Of-State Vendors

Case Law Update - Commerce Clause

  • Nexus Litigation in U.S. Supreme Court
  • Nexus Litigation in the State Courts
  • Intangible Holding Company Cases
  • Credit Card Cases
  • Economic Substance and Business Purpose Cases

Legislative Update - Post-Wayfair State Tax Economic Nexus Legislation

  • What (and Where) Is Economic Nexus?
  • The Pairing of Economic Nexus and Gross Receipts
  • Relevance of Click-Through Nexus Statutes
  • Market Place Providers - Reporting Obligations
  • Overview of Cloud Computing Issues
  • Multistate Tax Commission -Pl 86-272 Working Group
  • Federal Legislative Efforts - Business Activity Tax Simplification Act and Market Place Fairness Act

Nexus Enforcement Activity - How Does Nexus Affect Your Business Model?

  • Multistate Businesses and Internet Marketing
  • Financial Institutions and Credit Card Companies
  • Intangible Licensing Activities
  • Gift Card Income, Other Special Purpose Entities
  • International Transactions
  • How to Handle Nexus Assertions
  • Voluntary Disclosure Programs
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Why Lorman?

Over 32 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Webinar

This course was last revised on November 25, 2019.

Call 1-866-352-9540 for further credit information.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

Audio & Reference Manual

  • Arizona CLE 1.5
     
  • CA MCLE 1.5
     
  • CT CLE 1.5
     
  • HI CLE 1.5
     
  • IL CLE 1.5
     
  • ME CLE 1.5
     
  • MT CLE 1.75
     
  • NJ CLE 2.0
     
  • NV CLE 1.5
     
  • VT CLE 1.5
     
  • WA CLE 1.5
     
  • WV MCLE 2.0
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

  • Arizona CLE 1.5
     
  • CA MCLE 1.5
     
  • CT CLE 1.5
     
  • HI CLE 1.5
     
  • IL CLE 1.5
     
  • ME CLE 1.5
     
  • MT CLE 1.75
     
  • NJ CLE 2.0
     
  • NV CLE 1.5
     
  • VT CLE 1.5
     
  • WA CLE 1.5
     
  • WV MCLE 2.0
     
The CLE Code is ONLY a requirement when applying for CLE Credit in California (for participatory credit), Kansas, New Jersey or New York. Other states do not need to supply the CLE Code to apply for CLE credit.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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More Program Information

Why Lorman?

Over 32 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

John P. Barrie

John P. Barrie

Bryan Cave Leighton Paisner LLP

  • Partner in the Washington and New York offices of Bryan Cave Leighton Paisner LLP
  • Practice focuses solely in the areas of federal and state tax controversy and transactional matters
  • Regularly represents taxpayers before IRS Appeals Offices and the United States Tax Court
  • Transactional practice includes providing tax advice to public and private businesses in taxable and tax-free mergers, acquisitions, reorganizations, spinoffs, divestitures and restructurings
  • Former attorney-advisor, Judge Leon Irwin, United State Tax Court
  • Adjunct professor in the graduate tax program at Georgetown University Law Center, where he has taught courses in reorganizations and corporate tax planning and at New York Law School where he has taught courses in corporate tax planning, s-corporations and tax court litigation
  • Fellow of the American College of Tax Counsel
  • Listed in Best Lawyers of America and Super Lawyers
  • J.D. degree, University of California-Hastings; LL.M. degree in tax, New York University; B.A. degree, University of California-Los Angeles
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Why Lorman?

Over 32 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 406539
Published 2019
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