You and each of Your Registrants must meet the U.S. It shall be a continuing requirement that all usTLD domain name registrants maintain the US Nexus Requirement.Ĭertify in the Registration Agreement that to the best of his, her or its knowledge the domain name registrant has the authority to enter into the Registration Agreement and meets all the US Nexus Requirement set forth below. Upon such a finding, the registrant shall be given a total of thirty (30) days to cure the US Nexus deficiency. Nexus in order to qualify to register and maintain its use of a Registered Name. Nexus avoidance can even be an active planning process that may include the avoidance of company-owned delivery vehicles and avoiding the use of facilities in certain states that are known for being particularly aggressive about collecting sales taxes.Without limiting the foregoing, the Registration Agreement shall require each Registrant to certify, under penalty of perjury, that it has, and shall continue to have, a bona fide U.S. These activities can add to administrative headcount, so there is general resistance to having nexus applied to a business by yet another taxing authority. The main effect of nexus is that it requires a considerable amount of time by the accounting staff to keep track of tax rates, adjust customer billings, and remit taxes. Pay personal property taxes on any assets located within the region Remit the sales taxes to the applicable government entity Withhold sales taxes on all sales made within the region If nexus exists, a company must take the following steps:įile with the local state government to do business within the state, which requires a small annual filing fee Given these differences, it is best to contact the local state government for the applicable rules regarding nexus. Most states set a threshold value of $100,000 or 200 transactions per year as the minimum threshold for collecting sales taxes. Wayfair that a seller into a region can be required to collect sales taxes if the seller surpasses a minimum sales threshold. In addition to the preceding criteria, the Supreme Court established in South Dakota v. Their view includes the preceding items, plus the following ones:Ī company uses its own vehicles to transport goods inside of the borders of the taxing authorityĪ company sends its employees into the borders of the taxing authority in order to make sales calls, conduct training, and so forth, despite not being based within the regionĪ company sells data from a server that is physically located within the borders of the taxing authority (even if the server is owned by a third party) Some taxing authorities have expanded the definition of nexus in order to generate more tax revenue. Alternatively, nexus exists when a company pays the wages of an employee located within the borders of the taxing authority. Nexus is considered to have been established if a company maintains a facility of any type within the borders of the taxing authority. Given the multitude of taxing entities in the world, it makes sense to minimize nexus, thereby reducing the number of tax remittance and reporting obligations of the business. Whenever nexus can be established, a company must charge customers for taxes related to that taxing authority and remit the collected taxes to the taxing entity. Nexus is a link between a business and the territory governed by a taxing authority.
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