Nexus And State Tax Due Diligence


Table of Contents

I. Introduction...1

II. General Nexus Standards ... 2

A. Registration To Do Business...2

B. Nexus For State Tax Purposes ... 3

1. Nexus for Texas Franchise Tax Purposes... 3

2. Leniency for Texas Trade Shows... 4

3. Nexus For State Income Taxes and The Impact of Public Law 86-272 ... 4

4. Nexus for State Sales and Use Tax Purposes... 5

III. Nexus Due Diligence For Acquisition of a Business... 6

A. Due Diligence Checklist ... 6

B. Successor Liability Statutes ... 6

C. Tax Clearance Certificate Practice in Texas ... 7

Appendix 1 FASB Summary of Interpretation No. 48 Accounting for Uncertainty in Income Taxes-an Interpretation of FASB Statement No. 109 (Issued 6/06)

Appendix 2 Determining Whether Foreign Entity Must Register with the Texas Secretary ofState to Transact Business in Texas

Appendix 3 Nexus for Texas Franchise Tax Purposes

Appendix 4 SAMPLE - State Tax Due Diligence Checklist forAcquisition Target

Please see full publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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