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What is Nexus and How Might it Affect You and Your Business

ECS Article - Mission-Critical Services...What is Nexus and How Might it Affect You and Your Business

In today's business environment, companies are looking to expand and grow into new markets, and the information age is providing the opportunity to deliver products and services to multiple states and countries, quickly and cost effectively. But with market expansion comes tax ramifications that business owners may not be factoring into their plans.

Nexus is a connection or link associating two or more people or things. Businesses and sales, businesses and employees, businesses and contractors, individuals and investments: any of these could be a nexus creating relationship. State tax jurisdictions are working hard to identify these relationships, thereby tying your business to that state. The result could be increased tax filing and payment responsibilities for you and your business.

Some of the common activities that can cause nexus with another taxing jurisdiction (besides your home state) include: