In this day of tight budgets and the ability to do business electronically across state lines, states are looking more closely at how additional revenue can be generated through interstate commerce. But under the Constitution’s commerce clause, states cannot place an undue burden on the ability to do business across state lines. One type of undue burden would be taxing a business or individual who does not have some sufficient connection — or “nexus” — to that state.
The definition of nexus raises some interesting questions. Does a connection or link that creates a nexus mean that a firm needs to be physically present within the state, or does it mean that the firm must merely generate significant revenue from transactions within the state? The federal courts have not yet definitively decided that issue. As a result, many states have developed different methods of defining nexus and, in recent years, have begun to broaden that definition so they can increase their ability to tax businesses or individuals from other states.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
