Multistate business operations face a wide variety of state taxes.

Nexus can be a hidden danger for a company with a multistate presence. Certain activities might cause nexus for sales and use tax, income tax, franchise tax or other business taxes. One key to successfully navigating these widely varying provisions is for tax professionals to review the statutes and rulings of each state in which a business client might be considered as doing business. The connection might not be obvious, particularly for sales and use tax. And some states levy types of taxes that might not be familiar to business owners and managers, such as those on gross receipts or business activity.

Another, less well-known key is familiarity with states’ provisions for voluntary disclosure and amnesty. Businesses might need a CPA experienced in negotiating with the state or states in question to use these tax controversy resolution tools, especially if they didn’t think they had nexus for an earlier period but belatedly determine that they did.

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