What is nexus and how does it affect my business?

Nexus is the legal term for the connection between your business and a state that is sufficient to create a tax obligation in that state. Nexus can be established in a variety of ways — through a physical location, employees or independent contractors working in a state, ownership of property, or simply by exceeding an economic threshold of sales into a state (known as economic nexus). Since the Supreme Court’s 2018 South Dakota v. Wayfair decision, economic nexus has dramatically expanded the number of states in which many businesses have sales tax obligations — often without the business realizing it. Yeo & Yeo’s nexus analysis identifies where your business has established nexus, what type of tax obligations that creates, and what steps are needed to achieve compliance.