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Aggressive Nexus Actions by States Encourage Taxpayers to Get a Nexus Checkup and Consider Amnesty Programs

Posted Tuesday, July 12, 2011 by Michael A. Larson

alt textIn preparing for an upcoming speech on recent developments in state tax nexus, it became all too obvious that states are increasingly looking to out-of-state taxpayers to fill significant holes in their state budgets. By adopting click-through nexus standards, applying economic presence nexus and minimizing physical presence requirements, states are aggressively pursuing tax collection from out-of-state businesses.

For many businesses, a state tax nexus checkup is the first step in determining the risks of state taxation and making the critical business decisions of where to collect, file and remit state taxes. These nexus checkups, focus on truly understanding where and how the company does business. Once business operations have been analyzed, the risk of taxation can be measured and cost-benefit decisions can be made on changes in filing positions and/or changes to existing operations.

While many businesses can benefit from a state tax nexus checkup in any environment, the need for such knowledge is especially important now as states face some of the toughest economic times that they have faced in recent years. Further, armed with the knowledge of where a company faces its greatest risk of state taxes, businesses can take advantage of voluntary compliance and amnesty programs. Washington and Michigan recently ended their amnesty programs, but there are currently programs available in states such as Colorado and Ohio.

At Pivotal Law Group we are uniquely qualified to assist taxpayers with nexus checkups, risk assessments and assistance with voluntary compliance and amnesty negotiations. I am often called on to speak at professional conferences with respect to nexus issues and my years of experience in a national tax accounting firm prepared me to efficiently and effectively handle these topics. If you are interested in a nexus checkup, contact me at (206) 805-1490.

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