Weekly Round-Up: States Go Rogue – Pushing the Boundaries of Nexus

With action and clarity lacking from Congress and the U.S. Supreme Court, states have been emboldened to experiment with the legal boundaries of nexus, marking a new “wild west” in state laws designed to collect sales taxes from online merchants, a new article in this week’s issue of the Weekly State Tax Report by Laura Mahoney, Tripp Baltz, Michael Bologna, William H. Carlile, Martha Kessler, Gerald B. Silverman and Mark Wolski, all with Bloomberg BNA, provides.

A recent blog post by Bloomberg BNA State Tax Law Editor Ean Hamilton provides a short primer on the different types of state laws aimed at requiring sales or use tax collection from remote retailers.

The results have been wide ranging. Those laws that have withstood legal challenge show a marked gap between projected and generated revenues, no doubt making the payoff uncertain. How this will affect Congress's passage of a Marketplace Fairness Act, that would authorize states to require out-of-state sellers to collect sales taxes, remains uncertain.

The article, which provides an in-depth look at the landscape of this issue, can be read here .

The following table from the article summarizes state click-through nexus laws.


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 July 31, 2012, then click-through nexus is effective Jan. 1, 2013. If federal legislation isn't enacted, then A.B. 155 is effective Sept. 15, 2012.

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

Cal. Rev. & Tax. § 6203(c)

Connecticut (irrebutable 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)(M)

Illinois (irrebuttable presumption); repeal upheld by Performance Mktg. Ass'n v. Hamer , No. 114486 (Ill. 10/18/13)

July 1, 2011

More than $10,000

35 ILCS 105/2, 35 ILCS 110/2

Kansas (rebuttable presumption)

July 1, 2013

More than $10,000

Kan. Stat. Ann. § 79-3702(h)(2)(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

Pennsylvania Sales Tax Bulletin No. SUT 2011-01 (Dec. 1, 2011); proposed legislation in 2012 (H.B. 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) (H.B. 436)


In other developments…

Morrison & Foerster Newsletter issues its New York Tax Insights, February 2014 edition ,  which contains a look at a trial court’s upholding of the constitutionality of treating nonresidents' gain on 338(h)(10) transaction as New York source income.

Both Teams Lose at Super Bowl because of Jock Taxes , the Tax Foundation reports

Sutherland SALT shaker issues its January 2014 digest

Compiled by Priya D. Nair
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