See that’s not what Nexus means. It means that ANY business you conduct in another state might require you to pay income tax (not sales tax) in that state….as if you had a branch location in that state. State laws vary, but this is info I received from my accountant:
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– Sending an employee or subcontractor to perform work in another state can give you nexus, depending on the rules of that state. This is true whether or not the sale is to a client from that state or not, and causes some difficulty in apportioning a specific sale among the amounts of work done on various parts of the project.
– For Sales Tax purposes you need to see if you had nexus in HI, NM, SD, or WV. If so, then we need to find out if there is a sales tax exemption for Film Production, and if so, what that entails. Possibly, you need to file sales tax in those 4 states. You may even have to charge sales tax on items that are not taxable in your home state.
– For Income Tax Purposes, we need to define which states you were in, and find out their rules on nexus for income tax.
– We haven’t even gone this far yet, but if we find you have nexus for income tax purposes, this will likely also mean that the employees you send to those states will have to have their paychecks go to multiple states. As well as having Workers Comp in those states.
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So employees would have to have payroll checks issued in the states where we travel?
As you can see it’s much more than paying tax on items you buy. Its paying taxes in the state where you performed your duties on the income you made while you were there. In most cases it would be a portion of the entire amount that you billed the client on the final invoice. The state you travel to (in those cases that determine that your company has Nexus there) wants you to pay corporate income tax on the money you made while working there….even having to pay workers comp while you are there.
This seems completely ludicrous given the fact that we are told to travel to those states, not choosing to go there and that we are not selling anything in that state.
Rich Rubasch
Tilt Media Inc.
Video Production, Post, Studio Sound Stage
Founder/President/Editor/Designer/Animator
https://www.tiltmedia.com