States Changing to Factor Presence Nexus Standards

Controversy surrounds states replacing the traditional nexus standards with factor presence nexus standards. Nexus describes the amount of business activity that must be present before a state can tax an entity's income. Traditional nexus standards required physical presence in a state where as the new factor presence nexus standards do not. Taxpayers could now have tax filing obligations in states where they traditionally did not. California, Colorado, Connecticut, Michigan, Ohio, Oklahoma, and Washington are the seven states which currently have factor presence nexus standards in effect.

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