The definition of nexus in regard to state sales tax is “physical presence.” That physical presence clause defines what it means to be connected to a state and liable to collect and remit sales tax in that state.
There are various ways nexus can be created which make understanding and tracking nexus complicated. Many companies are not even aware they are not in compliance with sales tax laws or rules and regulations of the state in which they do business, and managing tax tables manually within your ERP solution can just add to the risk.
Some states now define nexus to include the physical presence of affiliates or salespeople in a state. Other states are trying to derive a computer screen as a physical presence in the state—and if you access your customers via that computer screen, you can be interpreted as having nexus in that state. Still others hold to the ruling that physical presence means you have a distribution center or warehouse in a state.
AvaTax Certs is a complete exemption certificate management service. From wizard-driven online collection to associating the correct certificate with transactions, AvaTax Certs ensures you maintain compliance and reduce your audit risk.
Paying sales tax may be inevitable, but the hassle is not. Selecting a cloud-based transactional tax management solution that performs behind the scenes, manages the entire tax compliance functions of your business and seamlessly integrates with your financial or ecommerce applications is critical to reducing your risk and audit liability. Let AvaTax take the complexity out of sales tax automation so you can focus on building your business!
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