Income Tax Nexus Definition
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That is any type of physical activity or connection with a state could allow that state to require the taxpayer to file an income tax return and to pay income tax bases on some allocation of income to the state.
Income tax nexus definition. The journal of accountancy advises that if you have nexus in a state for sales tax your nexus may not apply to income tax. Prior to 1959 the nexus rule for income tax was pretty much the same as for sales tax. The taxpaying entity must pay and collect sales taxes in that state if it has a nexus there and it must pay income tax on income generated there. Remember that income taxes are those that you pay to federal and state governments.
The taxes that you owe are a percentage of the. The nexus rules for income tax sales tax or franchise tax are not the same.
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