A trade show can creatA trade show can create a sales tax nexus depending on which state you share your exhibit. See the rules on Georgia, Illinois, and Texas.e a sales tax nexus depending on which state you share your exhibit. See the rules on Georgia, Illinois, and Texas.
Can a Trade Show Trigger Sales Tax Nexus?
I’m Mansoor Ansari with Nexus Tax Defense. If your business sets up an exhibit at a trade show, you may have created a nexus. A lot of states use both the number of days spent at a trade show and the net income derived from a trade show to make this judgment.
Georgia Sales Tax Nexus for Trade Shows
For example, in Georgia, a retailer is not considered to be engaged in business in the state if:
- The retailer’s sole physical presence in Georgia is to engage in trade show activities.
- The retailer and any of its representatives do not engage in trade show activities for more than 15 days in a given year.
- The retailer made less than $100,000 in a given year.
Illinois Sales Tax Nexus for Trade Shows
Contrast that to the state of Illinois. A business doesn’t need to register if:
- The retailer attends no more than two trade shows during any given year.
- The retailer is physically present at those two trade shows for less than eight days in a given year.
- The retailer sold less than $10,000 in a given year.
Texas Sales Tax Nexus for Trade Shows
The extreme case is in Texas, where a single day of trade show activities creates a sales tax nexus for the full year following the date of the trade show.
It’s really important to keep your proof of shipping so that the auditor doesn’t think that all of your sales are a result of a trade show in their state.
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Frequently Asked Questions
What is a sales tax nexus and how does it relate to trade shows?
A sales tax nexus is a legal connection between a business and a state, requiring the business to collect and remit sales tax. Attending trade shows in certain states can create this nexus if specific criteria are met.
Does participating in a trade show always create a sales tax nexus?
No, not always. It depends on the state’s rules. For instance, Georgia allows up to 15 days of trade show activity and under $100,000 in revenue without triggering nexus, while Texas considers even one day enough to establish nexus for a full year.
What are the sales tax nexus rules for trade shows in Illinois?
In Illinois, a business typically avoids nexus if it attends no more than two trade shows a year, spends fewer than eight days at them, and earns less than $10,000 in revenue from them.
Why is proof of shipping important for trade show sales?
Proof of shipping helps demonstrate that your sales were not made during the trade show itself, which can prevent states from assuming all your revenue came from the event and triggering a nexus.
How can businesses ensure compliance when attending trade shows in multiple states?
Businesses should research and document each state’s nexus thresholds, limit time and sales at trade shows where possible, and maintain shipping and transaction records to support their position during audits.