Nexus Analysis

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How do you know when you're operating in a new jurisdiction? In telecom, nexus determination is important to protect your company

“Nexus" is the requisite contact between a taxpayer and a state. before the state has jurisdiction to tax the taxpayer. Prior to the U.S. Supreme Court's 2018 decision in South Dakota v. Wayfair, a physical presence in the state was required for sales and use tax nexus for selling goods.

However, selling services, such as telecom, wireless data, internet access, VoIP, cloud computing, and myriad other digital technology and software products creates overlapping, conflicting, and burdensome nexus issues as jurisdictional definition is muddied.

As a result of deregulation, convergence and a variety of technological, regulatory, and economic factors, federal, state, and local taxes and other impositions are growing and often represent an unrecoverable burden on a company’s profitability. However, these taxes and impositions can be reduced or, in some instances, eliminated, by adjusting the way in which business is conducted.

The CommLaw Group’s nexus analysis, communications tax analysis, and specialized tax and fee services help clients adjust existing business relationships and/or operations, marketing, sales, billing and accounting practices, and organizational structures, in order to minimize or eliminate federal, state and local tax and regulatory impositions.

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