Tax & Accounting Blog

New Click-Thru Nexus Legislation

Indirect Tax, Sales Tax Nexus January 28, 2011

The “click-thru nexus” bill seems to be the legislation of the year. This week several more states have joined the ranks of those who have introduced legislation related to the taxation of remote sellers so far this year.

Arizona: On January 25th the Arizona House introduced H.B. 2551. This bill, if enacted, would create a rebuttable presumption that for Arizona transaction privilege tax purposes a person making sales of tangible personal property is presumed to be conducting business in Arizona if the seller contracts with a resident of Arizona who, for a commission or other consideration, directly or indirectly refers potential customers to the seller by an Internet website link or otherwise. The presumption would be applicable only if the cumulative gross income or gross proceeds from sales by the seller to customers in Arizona who are referred to the seller by all residents with that type of an agreement with the seller exceed $10,000 during the preceding 12 months.

Hawaii: The Aloha State also introduced a click-thru nexus bill on January 25th. H.B. 1183, if enacted, would along with the click-thru nexus provision, expand nexus and create a reporting requirement.

Rhode Island: R.I. on the other hand has introduced legislation that would repeal their click-thru nexus provision. H.B. 5115 was also introduced on January 25th.