Visit our Tax Updates Page to Discover the Latest Legislation Changes

Nexus Study

A comprehensive analysis of your company’s state and local tax filing footprint

Schedule Your Free Consultation Today!

    Member of our team will reach out to you soon

    What is a Nexus Study?

    Leyton’s initial approach to the development of a robust SALT strategy generally take the form of a ‘Nexus Study’: an in-depth analysis about whether your business has sufficient connections (or, Nexus) in a state to trigger the requirement to pay state taxes, including sales & use tax, income/franchise tax, employment tax, excise tax, and any other relevant state taxes.

    Every growth-minded business needs a State & Local Tax (SALT) strategy, and the first step to ensuring your business is positioned well from a SALT standpoint is determining which state taxes it should be filing, and where it should be filing them.

    Who should conduct Nexus Study?


    A Nexus Study is often conducted by tax professionals or consultants specializing in state and local taxation to ensure accuracy and compliance with tax laws.

    • How often should businesses update or revisit their Nexus Studies?

      Businesses should update or revisit Nexus Studies regularly, perhaps even semi-annually or quarterly, especially when expanding operations into new states or when there are significant changes in business activities that may affect nexus determinations.

    • What are the benefits of conducting a Nexus Study proactively?

      Proactively conducting a Nexus Study helps businesses avoid unexpected tax liabilities, penalties, and interest by identifying and addressing potential nexus issues in advance.

    • What are some common misconceptions about nexus and Nexus Studies?

      Common misconceptions include believing that only physical presence triggers nexus or assuming that low sales volume exempts a business from tax obligations.

    • Does online sales activity create nexus with a state?

      Yes, significant online sales activity can create nexus with a state, depending on the state’s laws. This can include sales volume thresholds or other economic factors.

    • Is nexus the same in every state?

      No, nexus rules vary by state. Each state has its own criteria and thresholds for determining when a business has nexus and is subject to state tax obligations.

    • What if my business has nexus in multiple states?

      If your business has nexus in multiple states, you may need to register for and comply with tax obligations in each state where nexus is established.

    Why is a Nexus Study important for businesses?

    A Nexus Study is important because it helps businesses identify potential tax obligations in various jurisdictions based on their activities and connections (nexus) with those jurisdictions.

    This strategy ensures that your business is

    1. Valued correctly
    2. Prepared for growth
    3. Compliant with state and local laws
    4. Ready for sales tax automation
    5. Well placed to tackle a state tax audit

    How Leyton Helps

    What many businesses don’t know is that while their CPA, payroll provider, and/or their Sales Tax software provider might be covering the ‘compliance’ (or, filing) component of their state taxes, these processes generally need additional support from a ‘consulting’ (or, strategic) perspective, ensuring that the right state taxes are being filed in the correct jurisdictions.

    Our experts do this by examining all locations of real and personal property, onsite and remote workforce employee locations, and all revenue streams. Our experts will provide you with an in-depth memorandum with recommendations for next steps, detailing the rationale and methodology used when reviewing company information and applying the relevant rules and regulations to the company’s specific scenario.

    Great People
    Define our Success

    Leyton’s State & Local Tax (SALT) experts work alongside your accountants and automation solutions to ensure that your business has its SALT affairs in order, providing accurate insights that enable sustainable business expansion. Whether it be identifying state tax exposures, rectifying those exposures, or providing advice on an ongoing basis, our experts will guide you through the complexities of SALT in a value-adding and efficient manner.

    Brian Ess, J.D.

    State & Local Tax Practice Leader
    Linkedin

    Explore
    Our other services

    Contact us to schedule an initial consultation

    Our in-house team of highly experienced scientists, engineers, tax consultants and attorneys would love to answer all your questions and support your compliance.

    Schedule a call arrow_outward arrow_outward