A trade show can create a sales tax nexus depending on which state you share your exhibit. See the rules on Georgia, Illinois, and Texas.
Transcript
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. For example, in Georgia, a retailer is not considered to be engaged in business in the state if, number one, the retailer’s sole physical presence in Georgia is to engage in trade show activities; number two, the retailer and any of its representatives do not engage in trade show activities for more than 15 days in a given year; and number three, the retailer made less than a hundred thousand dollars in a given year.
But contrast that to the state of Illinois. A business doesn’t need to register if, number one, the retailer attends no more than two trade shows during any given year; number two, the retailer is physically present at those two trade shows for less than eight days in a given year; and number three, the retailer sold less than ten thousand dollars in a given year.
Now, 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. So 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. If you have any questions, comment down below. Thanks for listening.
