Virginia ????

[schirallicpa]

I have a new client with property in NYS where they grow christmas trees to sell in VA.  They have only ever filed NYS returns.  I feel like maybe VA wants a cut of this.  I can't believe they haven't filed VA.  But want to confirm because I just cannot think on my own any more.

 

[ILLMAS]

Here is a good read, our office currently working with a specialist on nexus and it’s very interesting how some states are coming after business:

 

https://answerconnect.cch.com/topic/b43988327c6c1000a1f2d8d385ad169407/income-tax-nexus#:~:text=States cannot just impose income,physical presence is not needed.

 

 

[Lee B]

I guess it depends:

Are they actively selling trees in Virginia as a retailer or are they wholesaling trees to Christmas tree lots in Virginia?

Even if they are wholesaling trees, where does the selling occur in New York or in Virginia?

Need a lot more details?

[Medlin Software, Dennis]

Wayfair ruling has emboldened states.  The working guidance from MTC is very broad, although untested AFIK.  For example.  Non CA company.  Provides link on web site to trigger an email or start an online chat, and someone in CA uses this function.  This triggers nexus in the location of the person who initiated the contact.  The thought is it is "after" sale help, and no different than sending someone to the customer's site.  (CA is the first state to publish their take on the MTC guideline.  NY is up next.)

There is valid concern one better get their web site's server in their home state, such as those who offer software downloads, as "hosting" the download in a state may trigger nexus.  At least one state (TX) has a special waiver of nexus for web site hosting, which was funded by one of the big hosting players.

On the other hand, reality says unless there is profit (a large amount to be gained), many states will ignore this "new" revenue stream.  There is likely going to be a position or three in each state (depending on believed profit), where they look for and go after the profitable cases.