Two Recent Nexus Decisions

In one case, a multi-level marketing company was determined not to have nexus because they sold only through dealers who took title to the goods and were solely responsible for their further delivery to the customer. The company did have a physical presence, limited to a couple of visits by executives in a year and eight one day training seminars. The court ruled that was not enough physical presence.

On the other hand, a web seller of hotel rooms wound up having nexus in another state because they were considered to be the "furnisher" of the rooms (not the hotels themselves) and therefore were doing business in the state. The legalities get a little convoluted, so to simplify, I'd say the web company was essentially leasing the rooms from the hotels, then subleasing the rooms to the guests. In other words, the company was leasing property located in the state. And doing it a lot.

Watch yourself when it comes to nexus!

Sales Tax Guy
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