As more & more small businesses engage in E-commerce & sell products to consumers nationwide, it’s important to know where you have established Nexus.
You have established Nexus when you:
- Have a physical location within the state.
- Have employees that work within the state or regularly travel to the state to perform business functions.
- Have Property (including intangible property and inventory) in the state.
- Deliver tangible goods to that state’s residents (even if by common carrier).
If any of the above is applicable to your business, then you have established Nexus within that state & may be required to pay sales taxes.
As a Seller, it is your responsibility to know which state(s) your business is generating sales from: It’s possible to have Nexus in multiple states.
For 2022, in the wonderful state of OH (my home state), if a seller has at least 200 transactions or $100k or more in gross sales, then that Seller
is obligated to pay sales & use taxes.
However, most states exclude professional services, such as accounting services from paying Sales & Use taxes, with exception of Hawaii, New Mexico & South Dakota.
What’s great about the Quickbooks software, is that it has a Sales tax tool to assist you with maintaining your sales taxes & will update the sales tax rates automatically for the
the states you’ve listed, where you’re required to pay sales taxes.
This article should not be relied upon to determine if you have established Nexus in a particular state. Rather, it is an article to incite the conversation between you and your Tax Accountant to determine if you are obligated to pay sales taxes to a particular state.
