Once my client crosses the economic nexus threshold, how long does economic nexus last?
The duration of economic nexus differs by state. Some states have a rolling 12 months, while others will consider the previous (or current) calendar year. Businesses are required to monitor sales activity to determine when economic nexus no longer applies.
Your client is allowed to cancel their economic nexus registration when sales activity in a state no longer crosses that state’s economic nexus thresholds. However, if the business exceeds the threshold again, they will need to register for nexus a second time. Keeping an economic nexus registration and continuing to file returns in the years that the business does not meet the nexus threshold may be a more practical option for businesses with fluctuating sales. This will keep the registration active and prevent non-filing fees.
Davis, Davis & Harmon LLC are sales tax audit specialists who can help you navigate your organization’s most complex sales and use tax issues. Our award-winning team will ensure your business is properly protected from over-taxation. Our goal is to maximize your sales tax savings and return money to your company’s bottom line. Contact DDH Tax today.
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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.