Multi-State Tax Nexus Determination and Taxability Reviews
Miles Consulting Group specializes in identifying and managing your business’s taxable presence across states. Our Nexus Determination and Taxability Reviews ensure comprehensive compliance, minimizing risks and maximizing peace of mind.
Nexus & Taxability Review
Scope of A Nexus and Taxability Review
A Nexus and Taxability Review identifies where a company has established a taxable presence (nexus) in various states through physical presence or by reaching an economic threshold. This helps businesses understand their multi-state tax obligations.
Importance for Compliance
Understanding nexus is critical because it determines the states where a business needs to collect and remit sales tax. Non-compliance can lead to significant penalties and interest, making it essential to conduct thorough reviews. Many companies come to us because they want to be compliant going forward. But in order to properly register in a given state a company must determine when they first created nexus, and be ready to “fix the past” before it can properly move forward with current sales tax compliance.
Identification of Nexus Triggers
We analyze business activities, such as sales and the presence of employees or offices, to identify activities that may trigger nexus in different states. This helps determine where the company may owe taxes.
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Tax Exposure Assessment
We evaluate the extent of a company’s tax exposure by examining the sales of taxable goods and services in states where nexus is established. This assessment ensures businesses are aware of all tax liabilities.
Corrective and Strategic Planning
After identifying nexus and taxability issues, we assist in correcting past non-compliance and developing a tailored sales tax compliance strategy moving forward. This proactive approach mitigates future risks and ensures ongoing compliance.
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Frequently Asked Questions About Nexus & Taxability Review
Nexus refers to a business’s taxable presence in a state, which can be established through a physical presence like employees or offices, or by reaching a sales threshold defined by the state (economic nexus). Often companies are surprised to find that they’ve met nexus several years earlier. We help them accurately determine the actual nexus start date and thereby start the remediation and compliance path forward.
Nexus is determined by various factors including physical presence (offices, employees), sales volume, and other business activities. Miles Consulting Group conducts thorough Nexus and Taxability Reviews to identify and confirm a business’s nexus in different states.
Economic nexus is established when a business exceeds a state-specific sales threshold in terms of revenue or transactions, obligating the business to collect and remit sales tax, even without a physical presence in the state.
Determining nexus is crucial for compliance with state tax laws. Failure to recognize and act on nexus obligations can lead to significant penalties, interest on unpaid taxes, and other legal repercussions.
We work with a wide range of industries including technology (hardware, software, SaaS), retail, manufacturing, and construction, among others.
Miles Consulting Group serves businesses of all sizes, from start-ups to Fortune 500 companies.
The process involves identifying activities that may trigger nexus, determining the states where a taxable presence is established, assessing tax exposure, and formulating a compliance strategy. While we do need some basic information from our clients before starting, we do most of the heavy lifting, allowing your team to continue to do what they do best and minimizing the stress that comes from dealing with sales tax matters in multiple states.
Our Nexus and Taxability Reviews help identify prior non-compliance, and we assist in rectifying issues by filing past-due returns and working with tax authorities (often via a process known as voluntary disclosure) to resolve outstanding liabilities.
Reviews are recommended annually or whenever there are significant changes in business operations, such as expanding to new states or launching new product lines.
Yes, we provide strategic planning and ongoing support to ensure your company maintains compliance with multi-state tax regulations moving forward.
A taxability review assesses the products and services a business sells to determine which ones are taxable in various states, ensuring proper collection and remittance of sales tax.
We review business operations like sales, employee locations, office presence, and shipping practices to identify activities that might trigger nexus in different states.
We help address non-compliance by filing past-due returns, negotiating with tax authorities, and developing strategies to prevent future issues.
The duration varies based on the complexity of your business and the number of states involved, but most reviews are completed within a few weeks.
Yes, we offer comprehensive tax filing services as part of our compliance solutions, ensuring all state tax obligations are met accurately and promptly.
Economic nexus rules apply to online sales, meaning e-commerce businesses must collect and remit sales tax in states where they exceed sales thresholds, even without a physical presence there.
We typically require sales data, employee records, financial statements, and any relevant contracts or agreements that might affect tax obligations.
While our primary focus is on multi-state tax compliance in the U.S., we can offer initial guidance and refer you to trusted partners for international tax issues.
Our expertise in multi-state tax issues, personalized service, and deep understanding of various industries allow us to provide tailored, effective solutions that meet the unique needs of each client. Our team has experience in public accounting/consulting (including Big 4), private industry (specifically tech companies), and with state taxing authorities as former auditors. So we can provide a wealth of varied experience to every project.
