Jurisdictional Limitations: Attributional Nexus (Portfolio 1430)

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While there are numerous restraints on the ability of state tax administrators to widen the scope of their jurisdiction to tax, the most effective restraints are the Fourteenth Amendment due process clauses and the commerce clause of the U.S. Constitution. Therefore, the Jurisdictional Limitations: Attributional Nexus Portfolio discusses various applications of both commerce and due process clause principles in the specific area of states' jurisdiction to tax foreign entities.


In addition, the Portfolio provides analysis and discussion of numerous cases and rulings in which states attempted to assert attributional or affiliate nexus on the basis that a business entity has an agency, alter ego, or unitary relationship with an entity that has direct nexus with a particular state.


Arthur R. Rosen, Esq.

Arthur R. Rosen is a partner in the law firm of McDermott, Will & Emery, where his practice focuses on tax planning and litigation relating to state and local tax matters. He has served as the Deputy Counsel to the New York State Department of Taxation and Finance, Tax Counsel to the New York State Senate Tax Committee and Counsel to the N.Y. Governor's Temporary Sales Tax Commission. Arthur was previously a partner with Morrison & Foerster in New York and has held executive tax management positions at Xerox Corp. and AT&T. Arthur holds leadership positions in professional tax organizations including the New York State Bar Association Tax Section, the NYU Tax Society, and the National Association of State Bar Tax Sections. He is past chair of the State and Local Tax Committee of the American Bar Association Tax Section. Arthur is editor of the newsletter Inside New York Taxes, is co–editor of the newsletter New York Tax Highlights and of New York Tax Cases. He has written numerous articles that have appeared in professional publications and founded and chairs the New York University course entitled “Introduction to State and Local Taxes.”  

Table of Contents

Detailed Analysis


A. Introduction


A. Introduction

B. Transactional Nexus: The Connection Between State and Transaction

C. Presence Nexus: The Connection Between the State and the Corporation

D. The Two Nexus Requirements Need Not Be Related

E. The Relationship of Tax Nexus to In Personam Jurisdiction

F. The Presence Nexus Requirement and Its Application To Various Taxes

G. Unitary Apportionment


Introductory Material

A. Historical Background

1. Activities Within State

2. Tangible Property in a State

3. Intangible Property in a State

B. Post–Quill Developments

1. Sales and Use Taxes

2. Other Taxes

3. Intangible Property in a State


A. Background

B. The Agency Relationship As a Basis for Attributional Nexus

1. Non–Tax Authorities

2. Tax Authorities

a. The Book Club Cases

b. Direct Marketing Computer Companies and Provision of In-State Warranty Services

c. Electronic Commerce Companies and Provision of Customer Service by In-State Subsidiary

d. Nexus By Affiliation Statutes and Cases

(1) Current, Inc. v. California State Bd. of Equalization

(2) G.P. Group, Inc. v. Missouri Director of Revenue

(3) SFA Folio Collections, Inc. v. Tracy

C. The Alter Ego Basis for Attributional Nexus

1. Non–Tax Authorities

2. Tax Authorities

D. The Unitary Basis for Attributional Nexus


Working Papers

Working Papers

Table of Worksheets

Worksheet 1 Geoffrey, Inc. v. South Carolina Tax Commission 437 S.E.2d 13 (S.C. 1993)


Worksheet 2 Nexus Program Bulletin, NB 95–1 Computer Company's Provision of In-State Repair Services Creates Nexus