Do Contractors create a nexus

By January 3, 2022Sales Tax

Do Contractors create a nexus

If your business requires contractors that get paid on a 1099 to work for you in another state, then, you might have created a nexus. If that contract worker takes part in:

1. Helping you build and/or
2. Create a new market, then,

Most likely you have a nexus.

If you have contractors for the purposes of:
1. Generating sales,
2. Deliveries, or
3. Taking orders for personal tangible property or services, then, they are required to register and collect sales tax.

In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus.

In Michigan, they say that using an agent to own, rent, lease, use, or maintain a place of business on your behalf can also create substantial nexus. But nexus factors are NOT ONLY limited to the above scenarios.

Depending on the state, you have to look into the local rules and court decisions.

Do Contractors create a nexus

Ansari Law Firm

Author Ansari Law Firm

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