In Case You Missed It: Last Week in Allyn Tax News (January 19 - 22)

Allyn Tax Fun Facts

Happy Monday! Are you ready for more Allyn Tax Fun Facts?

In the Netherlands, people have successfully claimed tax deductions for rubber ducks. A teacher deducted the cost of rubber ducks used in her classroom as a teaching tool.

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Types of Nexus Triggers

Nexus, the critical link between a business and a state's tax jurisdiction, can be established through various channels. The two primary types of nexus triggers are physical presence nexus and economic nexus.

1. Physical Presence Nexus

Physical presence nexus, linked to the traditional brick-and-mortar model, arises when a business has a tangible presence within a state. Even temporary interactions, like attending events, can trigger nexus in some states. Definitions vary, emphasizing the importance of careful analysis before expanding operations into new jurisdictions.

2. Economic Nexus

A business can be liable for the collection and payment of sales tax to a state, even without a physical presence in the state. This link is called economic nexus and it is met once a business exceeds a state's threshold of gross sales or number of transactions in the state. These thresholds vary by state and can change over time as states update their sales tax laws.

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Suite Escapes

The Arizona Court of Appeals vacated the Arizona Superior Court's decision awarding the city of Tucson taxes, interest, and penalties and remanded back to the superior court. The taxpayer, an online travel company (OTC), operates websites where travelers can book hotel rooms. Previously, the Arizona Supreme Court found that the OTCs are brokers, but are not hotel operators or hotels, and therefore are liable to the Cities under Model City Tax Code (MCTC) § 444, but not § 447. Because factual issues existed regarding the retroactive application of MCTC § 444, the supreme court remanded the case to the superior court to determine whether MCTC § 542(b) barred the cities from assessing taxes. The court of appeals found that the taxpayer was not liable to Tucson under § 19-66 because it performs none of the taxable activities listed in the code section. Accordingly, the court held that the taxpayer was not liable and vacated the superior court's award to Tucson of taxes, interest, and penalties.

 

Poll

Happy Thursday! Today, we want to hear from you!

Navigating Nexus Procedures is vital for a smooth experience! We've designed this brief poll to gather insights into what will contribute to your success in managing Nexus-related processes. Take a moment to share your thoughts by casting your vote, and feel free to provide additional insights or pose any questions in the comments below!

If you conduct business in multiple states, have you proactively assessed your sales tax state threshold to ensure compliance?

• Yes, regularly
• Only in some states
• No, I’m unsure where to start
• It does not apply to me

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