In a recent blog, we discussed how the 2018 South Dakota v. Wayfair decision has been significantly impactful in altering the sales and use tax implications in majority of the states. As our readers know, the term “nexus” indicates the amount of contact necessary by a company in order to be obligated to collect sales tax in a state. In order to impose a tax obligation, nexus must be created – either by physical presence (for instance, employees, contractors, an office, or inventory in the state) or because of economic nexus, which measures the minimum amount of sales revenue or transaction volume that creates nexus and differs from state to state.
Nexus in a COVID-19 Environment
As the pandemic has forced employees to work from their homes, is it time to take a look at how that might unexpectedly create nexus for companies? Do teleworkers indeed create nexus for the businesses during a pandemic? Do states provide any exception to the physical presence rule for sellers who usually work in one state (the company location) but live (and now work) in another as a result of the COVID-19 pandemic?