New Tax Obligations for Businesses: Economic Nexus Standards and Their Impact on State Taxation


CLE Credits earned: 2 GENERAL (or 2 LAW & LEGAL for WA state)

In today’s internet and cloud economy, states are expanding tax nexus limits, relying upon a vendor’s economic nexus to impose tax jurisdiction over out-of-state vendors. Vendors, for many years, have relied upon a physical presence standard, re-affirmed in Quill v. North Dakota, to determine whether sufficient nexus was attained for reporting and tax collection purposes. With the United States Supreme Court’s 2018 decision in South Dakota v. Wayfair, overturning the court’s physical presence threshold for use tax collection purposes, states are reviewing their nexus statutes to expand their jurisdiction over out-of-state vendors. This major change requires all vendors to review their state filing obligations and to review the changing nexus laws in the states they have customers.

This course is co-sponsored by the Federal Bar Association.

Key Topics to be Discussed:

•   Understand the basic rules for a state to impose its taxing jurisdiction on out-of-state vendors and service providers
•   Understand the impact of South Dakota v. Wayfair and its implications for tax reporting and tax collection obligations
•   How to recognize and handle nexus tax exposure and investigations by the states
•   Impact of South Dakota v. Wayfair on international transactions

Date / Time: April 3, 2019

•   2:00 pm – 4:00 pm Eastern
•   1:00 pm – 3:00 pm Central
•   12:00 pm – 2:00 pm Mountain
•   11:00 am – 1:00 pm Pacific

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SKU: N/A Categories: ,
Original Broadcast Date: November 6, 2018

John Barrie, Esq.

Mr. Barrie’s practice focuses solely in the areas of federal and state tax controversy and transactional matters. He regularly represents individuals and business entities in federal and state tax controversy matters, including before IRS Appeals Offices, the United States Tax Court, the United States Court of Federal Claims, United States District Courts, as well as in various state courts in state tax matters. Tax litigation and tax controversy matters have included valuation issues (valuation of art work, easements, closely held businesses), excise tax issues, summons enforcement, offshore voluntary disclosure, transfer pricing, as well as various technical Code section interpretation and documentation issues.

Mr. Barrie’s transactional practice includes representing public and private businesses in taxable and tax- free mergers, acquisitions, reorganizations, spin-offs, divestitures and restructurings, as well as representing clients before the IRS National Office in connection with ruling requests and technical advice.

Mr. Barrie is a member of the American Bar Association Section on Taxation and past vice-chair of the Tax Section. He is currently Chair of Taxation of Business Entities for the New York City Bar Association. He is an adjunct professor in the graduate tax program at Georgetown University Law Center, where he has taught courses in reorganizations, spin-offs and corporate tax planning and at New York Law School, where he has taught courses on corporate tax planning, S corporations and Tax Court litigation.

Mr. Barrie is on the board of advisors for the Journal of Taxation and Regulation of Financial Institutions. He was a past editor on state tax matters for State Tax Notes and an advisor and department editor for the Journal of Multistate Taxation. Mr. Barrie has served as an attorney advisor to Hon. Leo H. Irwin, U.S. Tax Court, in Washington, D.C.

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Section I. Overview
a) Due Process and Commerce Clause Nexus – the General Rule
b) U.S. Supreme Court Authority – What is Substantial Nexus?
c) Impact of South Dakota v. Wayfair
d) Does Merely Having Customers in a State or Generating Income From a State Create Tax Nexus?
e) Opens Issue after Wayfair
f) Potential Federal Legislation
g) P.L. 86-272 Imposes Additional Restrictions in Addition to Commerce Clause and Due Process Issues

Section II. Discussion of Recent and Pending Cases Impacting Out-Of-State Vendors

Section III. Case Law Update
a) Nexus Litigation in U.S. Supreme Court
b) Nexus Litigation in the State Courts
c) Amazon Litigation – Obligations of Market Place Providers
d) Intangible Holding Company Cases
e) Credit Card Cases
f) U.S. Supreme Court Activity and Inactivity
g) Economic Substance and Business Purpose Cases
h) Retroactive Issues

Section IV. Case Law Update – Due Process Clause, Scioto and Conagra Cases

Section V. Legislative Update – Economic Nexus, Click-Through Nexus. What’s Next?
a) What (and Where) is Economic Nexus?
b) The Pairing of Economic Nexus and Gross Receipts
c) What (and Where) is Click-Through Nexus?
d) Overview of Click-Through Nexus Statutes
e) Impact of Wayfair
f) Treatment of Market Place Providers
g) Overview of Cloud Computing Issues
h) Multistate Tax Commission – Factor Nexus Proposals
i) Federal Legislative Efforts – Business Activity Tax Simplification Act and Market Place Fairness Act Legislation
j) State Tax Legislative Efforts to Implement Wayfair

Section VI. Nexus Enforcement Activity – How Does Nexus Affect Your Business Model?
a) Multistate Businesses and Internet Marketing
b) Financial Institutions and Credit Card Companies
c) Intangible Licensing Activities
d) How to Handle Nexus Assertions
e) Voluntary Disclosure Programs