Sales tax nexus can be triggered by an out-of-state corporation that leases space on a third party’s web server located within their borders, several states have indicated in the preliminary results of the Bloomberg BNA 2013 Survey of State Tax Departments.
But some states also indicated that nexus would not be created by an out-of-state corporation that pays a web hosting provider with a server located in their jurisdiction to provide the corporation with web services that enables the firm to sell products over the internet.
The 2013 survey asks each of the states if sales tax nexus would result for a corporation that makes remote sales of tangible personal property in the state and
The preliminary results of the 2013 survey show that Arizona was among several states that indicated that nearly all of the above listed activities would trigger sales tax nexus. The sole exception for Arizona was paying for services to a web hosting provider with an in-state server. “The key inquiry is whether the Arizona third party is creating or expanding a market in this state for the remote vendor,” an official with the Arizona Department of Taxation told BNA. “The more indicia, the more likely the remote vendor will have nexus for the transaction privilege tax.”
By Steven Roll
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