Articles Posted in Nexus



The Supreme Court in South Dakota v. Wayfair, Inc. overruled the “physical presence” requirement as “unsound and incorrect” and ruled that “substantial nexus” is satisfied when an out-of-state seller has sufficient “economic and virtual contacts” with the state. The prior Supreme Court precedent in National Bellas Hess, Inc. v. Department of Revenue of Illinois and Quill Corp. v. North Dakota required out-of-state sellers to collect and remit sales/use tax on retail sales of certain tangible personal property and services only if the seller had “physical presence” with the state.

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Assembly Bill 2412 (Migden and Aroner), now pending in the California Legislature, would drastically expand the California rules for nexus to tax under the California Sales and Use Tax Law. The bill should be of high interest to Internet retailers who do not have a physical presence in California. A.B. 2412 would expand California law to provide that a retailer has nexus with California based solely on the relationship between the out-of-state retailer and another retailer who does have nexus with California.

(The remainder of this article can be accessed in the July/August 2000 edition of Cyberspace Lawyer.)

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