Nexus

From Tax Rates Wiki

In relation to sales tax, nexus refers to a physical presence in a tax authority that would require a company to collect and remit tax. Sometimes this is straightforward. For example, a small business with presence and customers in only one physical location, would only have nexus inside that geographical boundary. A storefront, district sales office, or company headquarters would usually be considered a physical presence.

Other examples are less obvious and can lead to disagreements and even litigation between a corporation and a would-be tax authority. These less obvious examples would include a traveling sales person on a regular route, a data center or other network presence.

Because U.S. Congress regulates Interstate Commerce, a state cannot impose nexus legislation that would conflict with Federal regulations.

References

Avalara offers sales tax consulting, including [Nexus Analysis].