State and Local Tax Nexus Studies

The term ‘nexus’ refers to the connection your business has with a particular state that triggers tax obligations in that state.

Determining the extent of your nexus can be a complex process, given the myriad of rules in all the different states and localities.

Determining your business’s nexus in each state where you operate or have sales is absolutely necessary to ensure compliance with state and local tax laws. Failing to accurately determine and report your nexus can result in significant penalties, interest, and the potential for tax audits and legal issues.

By conducting a nexus study, you can identify where your business should be filing returns and past tax exposure. This will allow you to focus on growing your business without worrying about unexpected liabilities.

Our DHJJ state and local tax experts can assist in determining your business’s filing requirements by performing a nexus study.

What does a nexus study involve?

A nexus study typically involves thoroughly reviewing your business’s activities in each state where it operates or has sales. The study will include the following:

• An analysis of your business’s physical presence in each state (e.g., employees, property)

• A review of your business’s sales and other transactions in each state

• An analysis of any state-specific rules or exemptions that may impact your nexus determination

Based on the above, a determination of which types of taxes your business may be subject to in a state or locality. Additionally, we can estimate the amount of tax owed, past exposure, and the options available to settle past exposure.

State and Local tax Planning Services for Your Business

If your business operates in multiple states, a nexus study by DHJJ can provide a valuable tool for minimizing tax liability and ensuring compliance with state laws. Connect with our state and local tax experts at DHJJ with any questions and how to begin a nexus study.