State and Local tax (SALT) Nexus Analysis (SNS)

 

As state and local governments look for more revenue, one group they continue to aggressively target is out of state businesses. Nexus is the minimum contact required between a business and a state or local government before a business can be subjected to that government’s tax filing requirements. State and local governments continue to assert nexus for businesses with little or no physical contact with that government. While the power of state and local governments to impose taxes on out of state businesses is limited by the U.S. Constitution, this limitation has not stopped them from aggressively pursuing this issue. To make matters more complicated, states and localities have taken different approaches as to what types of activities create nexus, particularly for non-sales and use taxes.

 

SNS is designed to review a client’s filing history, current business operations (including products, services, locations and sales channels), and future business plans to determine where a client has sufficient nexus to be required to file tax returns. Our professionals understand the overriding principles of nexus and have experience dealing with the maze of state and local nexus laws. Once we determine in which states and localities a business has nexus, we estimate the potential tax exposure. SNS focuses on the following tax types: sales, use, gross receipts, income, franchise, and net profit.

 

As a law firm, our analysis is protected by the attorney client privilege.  We have the ability to also work with businesses to draft contracts and employee rules that can reduce the risk of future nexus exposure.

Once SNS is completed, we assist our clients with resolving any potential liability through our Voluntary Disclosure services. Please click on the following link to see an explanation of our Voluntary Disclosure services.