Nexus for Sales Tax Definition
Nexus is defined as an out-of-state business entity having “presence” in another state. This presence in a state makes a business subject to sales and income tax within that state.
Nexus for a business is determined by each state individually base on corresponding tax laws. A business may have may have a physical location presence in the state, resident employees in a state, employees who solicit business in the state or property (tangible or intangible) in a state. While physical presence is the most common criteria for nexus, there have been recent laws regarding affiliate vendors.