Arkansas tax assessment shows how easy it is to create nexus
Reminder: The location of your independent contractors or remote employees can create nexus for you in various states. One taxpayer learned this the hard way after being assessed for sales tax in Arkansas, according to Allyn Tax News.
Although an employer claimed it didn’t have nexus in the state since it had no physical presence in Arkansas, the Dept. of Revenue said otherwise.
Because the employer worked with both employees and independent contractors headquartered in Arkansas, that was enough to establish nexus, per the department. So the employer had to pay use tax owed for each month it worked with those contractors and employees.
It’s key that you’re aware of the physical location of all your employees and contractors so you’ll know if you’re creating nexus and have sales and use tax – or other tax obligations – in these states.
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