Know the facts about Tax Shark

Posted by Yafr Qqater in Business

The activity of solicitation is what decides whether or not a nexus has been created. However, a number of states have set strict criteria (number of days spent at a trade show) to determine whether a company exhibiting at a trade show has formed nexus in the state. For example, California has established a standard of more than fifteen (15) days, which means that if you attend trade shows in California for less than fifteen (15) days, you have not established a nexus in the state (assuming this is your only activity within the state). 6203(d); Cal. Code Regs. 18 1684; Cal. Rev. & Tax. Cd. 6203(d) (b). Checkout Tax Shark for more info.
If a person’s only contacts with Michigan are: (1) attending a trade show where no orders for goods are taken and no sales are made, or (2) participating in a trade show where no orders for goods are taken and no sales are made for less than 10 days cumulatively on an annual basis, a nexus with Michigan is not formed. This rule does not apply, however, if a person also engages in the following activities: soliciting sales; making repairs or providing maintenance or service to property sold or to be sold; collecting current or delinquent accounts related to sales of tangible personal property or services, whether through assignment or otherwise; delivering property sold to customers; installing or supervising installation 05/12/1999, Michigan Revenue Administrative Bulletin 1999-1. For this type of activity, technology companies should carefully plan where they will attend trade shows and understand the sales tax nexus thresholds associated with each state.