“Nexus” may sound like the name of a new smart phone, but it actually refers to the relationship of a taxing jurisdiction that enables it to subject your business to taxation. In addition to your business’ home state and city, other states and local jurisdictions where you conduct business can have nexus.
In the past, nexus was determined by a physical presence such as a branch office or manufacturing facility, but e-commerce has extended the definition of nexus. Nexus requires a business to file returns for sales tax and for income or franchise taxes. If you don’t file, your business may be liable for past due taxes, penalties and interest.