KPMG report - States aim at expanding sales and use tax nexus 

April 29: The number of states attempting to expand their reach over out-of-state retailers through “nexus legislation” similar to laws enacted in other states continues to grow.

In general, the legislative proposals include click-through nexus provisions and expanded affiliate and / or attributional nexus rules.

Only one state—Kansas—has thus far enacted such legislation. Another bill has been passed by the West Virginia legislature and is pending action by the governor. Given that New York's highest court recently upheld the constitutionality of New York’s click-through nexus statute (read TaxNewsFlash-United States (March 28, 2013)) it could be likely that lawmakers in more states might follow suit.

Other states that have considered or are currently considering click- through nexus or expanded affiliate and / or attributional nexus bills include Colorado, Florida, Hawaii, Indiana, Massachusetts, Maryland, Maine, Michigan, Minnesota, Mississippi, Missouri, Ohio, Oklahoma, Pennsylvania, and Utah.


In addition to click-through nexus, Kansas Senate Bill 83 (signed April 16, 2013) establishes a presumption that a retailer has nexus for sales and use tax if a person with Kansas nexus:

  • Sells a line of products similar to the retailer under a business name that is the same or similar to the retailer
  • Maintains a warehouse in Kansas that facilitates the delivery of property to the retailer's customers
  • Uses trademarks, service marks, or trade names in Kansas that are the same as or substantially similar to the retailer's
  • Delivers, installs, or performs maintenance services for the retailer's customers in Kansas
  • Facilitates the retailer's sale of property to customers
  • Has a franchisee or licensee operating under the retailer's trade name
  • Conducts any other activities in Kansas that are significantly associated with the retailer's ability to maintain a market in the state for sales

Under all these circumstances, the presumption of nexus can be rebutted if it is demonstrated that the activities of the in-state persons are not significantly associated with the retailer’s ability to establish or maintain a market in the state for sales.

West Virginia

West Virginia House Bill 2754, passed by both houses of the West Virginia legislature and currently awaiting action by the governor, would generally deem that nexus exists for an out-of-state seller if an entity related to or unitary with the seller:

  • Maintains a place of business in the state
  • Performs services in the state in connection with the goods or services sold by the seller or any related entity, or
  • Solicits business in the state for the seller.

Unlike Kansas Senate Bill 83, the West Virginia bill does not allow a seller to rebut the presumption that nexus exists.

Read this April 2013 report prepared by KPMG’s State and Local Tax practice: Multistate: A Number of States Introduce Legislation Aimed at Expanding Sales and Use Tax Nexus

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