July 1, 2025
Understanding nexus is no longer a niche compliance issue but a core strategic imperative for any multistate business. Historically, nexus analysis was a qualitative exercise centered on tangible assets and physical locations, such as offices, employees, and inventory. This was a relatively straightforward assessment managed through fixed asset ledgers and human resource records. In the modern era, however, the analysis has become intensely quantitative and virtual. States are moving beyond the traditional concept of a physical connection and are now asking a more fundamental question: "Is your business deriving economic benefit from our state's market purposefully?". This concept of "market exploitation" is the single most important trend driving state tax policy today, evident in the language of court decisions discussing a seller's "extensive virtual presence" and in state statutes that define "doing business" as any transaction for financial gain.
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