Sales Tax Slice: 2013 Saw Four More States Jump onto Click-Through Nexus Bandwagon Despite Mixed Judicial Success

This year was another year in which states did not have federal guidance on “click-through” nexus provisions, so they continued to make their own. Four states – Kansas, Maine, Minnesota and Missouri – enacted new click-through nexus provisions this year.

In general, “click-through” nexus statutes create a presumption of sales tax nexus for out-of-state sellers that compensate in-state residents (“associates”) for sales made via links on their websites.

New York enacted the first of these laws in 2008. It still stands after the U.S. Supreme Court recently denied cert. to a case challenging it in v. New York State Department of Taxation and Finance. (U.S. 13-259, cert. denied 12/2/2013; LLC v. New York Dept. of Taxn. and Fin., U.S., No. 13-259, cert. denied 12/2/2013).

In fact, the only roadblock that click-through nexus provisions have faced this year is the Illinois Supreme Court’s decision to strike down the state’s click-through nexus provision after concluding that it discriminated against electronic commerce in violation of the Internet Tax Freedom Act, which expires in 2014.

Of the new click-through nexus statutes this year, they all look much more like New York’s statute than Illinois’. The Illinois statute imposed an irrebuttable presumption of being a retailer or serviceman in the state and specifically targeted Internet retailers. In contrast, New York’s statute has a rebuttable presumption and can be applied more broadly than referrals to a website.  Instead, New York’s law defines the term “vendor” to include any person who solicits business in the state through employees, independent contractors, agents, or other representatives and, by virtue of that connection, makes sales within the state.

The chart below shows the states that have enacted click-through nexus provisions, and includes the Illinois provision, which was struck down.


Effective Date

Affiliate Threshold


Arkansas (rebuttable presumption)

Oct. 24, 2011

More than $10,000

Ark. Code Ann. § 26-52-117

California (rebuttable presumption

If federal legislation is enacted by 7/31/12 then click-through is effective 1/1/13. If federal legislation is not enacted, then AB 155 is effective 9/15/12.

More than $10,000 (and more than $1 million in annual in-state sales)

Cal. Rev. & Tax. § 6203(c)

Connecticut (irrebuttable presumption)

July 1, 2011

More than $2,000

Conn. Gen. Stat. § 12-407(a)(12)(L)

Georgia (rebuttable presumption)

Oct. 1, 2012

More than $50,000

Ga. Stat. Ann. § 48-8-2(8)(K)

Illinois (irrebuttable presumption); repeal upheld by Performance Mktg. Ass’n v. Hamer, No. 114486 (Ill. Oct. 18, 2013)

July 1, 2011

More than $10,000

35 ILCS 105/2 and 110/2

Kansas (rebuttable presumption)

July 1, 2013

More than $10,000

Kan. Stat. Ann. § 79-3702(C)

Maine (rebuttable presumption)

 Oct. 9, 2013

More than $10,000

Me. Rev. Stat. Ann. § 1754-B(1-A)(C)

Minnesota (rebuttable presumption)

July 1, 2013

More than $10,000

Minn. Stat. § 297A.66(4a)

Missouri (rebuttable presumption)

Aug. 28, 2013

More than $10,000

Mo. Rev. Stat. § 144.605(2)(e)

New York (rebuttable presumption)

June 1, 2008

More than $10,000

N.Y. Tax Law § 1101(b)(8)(vi)

North Carolina (rebuttable presumption)

Aug. 7, 2009

More than $10,000

N.C. Gen. Stat. § 105-164.8


Sept. 1, 2012

None specified

Tax Bulletin 2011-01; proposed legislation in 2013 (HB 1043)

Rhode Island (rebuttable presumption)

July 1, 2009

More than $5,000

R.I. Gen. Laws § 44-18-15

Vermont (rebuttable presumption)

When adopted in 15 other states

More than $10,000

Vt. Stat. Ann. tit. 32, § 9701(9)(I) (HB 436)


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