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I would like to know if nexus for sales tax collection

Customer Question
purposes would be created, and...
I would like to know if nexus for sales tax collection purposes would be created, and supporting case law, for the state of TX if a manager/administrator had a home-based office within the state however the corporate office was outside of TX. The manager would not be selling any product directly, nor would they be visiting with clients, or stocking product, or shipping product, purely just office administrative duties. All sales, support, warehousing, distribution, shipping etc. would be performed by the out of state corporate office.
Submitted: 7 months ago.Category: Business Law
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Answered in 2 hours by:
12/22/2017
Business Lawyer: Asad Rahman, Attorney replied 7 months ago
Asad Rahman
Asad Rahman, Attorney
Category: Business Law
Satisfied Customers: 2,556
Experience: Practicing Attorney with 10 years experience
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I don't understand what you mean by "nexus for sales tax collection"

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Business Lawyer: Asad Rahman, Attorney replied 7 months ago

I am based out of Texas so I'm happy to research. You are seeking when sales tax is due?

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Customer reply replied 7 months ago
Due to the presence of the manager in TX, would the out of state corporate office need to collect sales tax for the orders taken from the corporate office and shipped to TX?
Business Lawyer: Asad Rahman, Attorney replied 7 months ago

OK let me do some research. My gut is that yes it applies as they entered the stream of commerce in Texas.

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Business Lawyer: Asad Rahman, Attorney replied 7 months ago

Yes, I believe having a manager located in Texas establishes the "nexus" threshold based on my research.

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Business Lawyer: Asad Rahman, Attorney replied 7 months ago

Here is an outline of the requirements I applied in coming to this conclusion...http://www.salestaxsupport.com/sales-tax-information/sales-tax-by-state/overview-and-nexus/texas/#tx-nexus-general-requirements

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Customer reply replied 7 months ago
I looked at the link you provided which is straight from the TAC: http://texreg.sos.state.tx.us/public/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tloc=&p_ploc=&pg=1&p_tac=&ti=34&pt=1&ch=3&rl=286Clarifications needed point by point:1) What is the definition of "....where business is conducted;"
2) This statement "...purpose of selling or delivering or the taking of orders for a taxable item;" would not apply since this manager would not have any direct sales activities.
3) This statement "derives receipts from the sale..." would not apply due to no direct sales activities
4) This statement "engages in regular or systematic solicitation of sales..." would not apply due to no direct sales responsibilities
5) This statement "solicits orders for taxable items..." would not apply due to no direct sales responsibilities
6) This statement "has a franchisee or licensee..." does not apply
7) This statement "holds a substantial ownership interest in..." does not apply
8) This statement "holds a substantial ownership interest in..." does not apply
9) This statement "otherwise does business in Texas." is too generic and does not exist in TAC34 rule §3.286Additionally, from the TX state comptroller's office, this link describes some examples of "in business" and "not in business" within TX.Under the first section, following the same point by point analysis seems to agree that this position would not be in business especially considering the first example "...where you sell taxable items or services.".Under the "not in business" section, the position passes those three tests depending on the legal definition of "physical presence". If physical presence includes active, direct sales activities, then the position would not be in business and thus have no relevant nexus requiring collecting of sales tax by the out of state corporate office.Please advise your opinion of this analysis.
Customer reply replied 7 months ago
Comptroller page link:
https://comptroller.texas.gov/taxes/publications/94-108.php
Business Lawyer: Asad Rahman, Attorney replied 7 months ago

My recommendation since we are very much in a gray area is having an attorney or accountant solicit an opinion directly from the Texas Comptroller's office.

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Business Lawyer: Asad Rahman, Attorney replied 7 months ago

Right now it's just my interpretation but clear written guidance from them is actually enforceable against a future audit.

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Customer reply replied 7 months ago
How would that be done?
Business Lawyer: Asad Rahman, Attorney replied 7 months ago

Try calling this number...

Otherwise an accountant or attorney can send a request on your company's behalf.

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