The Evolution and Future of Substantial Nexus in State Taxation of Corporate Income


Book Description

The proper nexus standard for state taxation of out-of-state corporations has been a contentious issue since the Supreme Court decided Quill Corp. v. North Dakota in 1992. The Court upheld a physical presence standard in that case, but numerous state courts have since affirmed economic presence standards, holding that a cor-poration does not have to have a physical presence within the taxing state to be subjected to corporate taxes in that state. This Note exam-ines the evolution of state taxation of out-of-state corporations, in-cluding some of the most recent state tax court decisions on the topic, and analyzes whether there are any overarching principles that may be gleaned from the various decisions. The Note then speculates about the consequences of the proliferation of the economic pres-ence standard and whether there is any limit to its application.




State Taxation


Book Description




Exploring the Nexus Doctrine In International Tax Law


Book Description

In an age when cross-border business transactions are increasingly effected without the transference of physical products, revenue concerns of states have led to a multitude of tax disputes based on the concept of ‘nexus’. This important and timely book is the most authoritative to date to discuss one of the major tax topics of our time – the question of how taxing rights on income generated from cross-border activities in the digital age should be allocated among jurisdictions. Demonstrating in prodigious depth that it is the economic nexus of the tax entity or activity with the state, and not the physical nexus, which meets the jurisdictional requirement, the author – a leading authority on this area who is a Senior Commissioner of Income Tax and a Member of the Dispute Resolution Panel of the Government of India – addresses such dimensions of the subject as the following: whether a strict territorial nexus as a normative principle is ingrained in source rule jurisprudence; detailed scrutiny of such classical doctrines as benefit theory, neutrality theory, and internation equity; comparative critique of the Organisation for Economic Co-operation and Development (OECD) and United Nation (UN) model tax treaties; whether international law and customary principles mandate a strict territorial link with the source state for the assumption of tax jurisdiction; whether the economic nexus-based tax jurisdiction and absence of a physical presence breach the constitutional doctrine of extraterritoriality or due process; and whether retrospective tax legislation breaches the principle of constitutional fairness. The book offers a politically informed analysis of the nexus principle and balances the dynamics of physical presence and economic nexus standards, based on an in-depth survey of the historical evolution of judicial pronouncements and international practices in this regard. Dr Singh’s book exposes an urgently needed missing link in the international source rule literature and takes a giant step towards solving the thorny question of appropriate tax apportionment. It sheds brilliant light on the policies states may adopt when signing new tax treaties, so that unintended results may be foreseen and avoided. Tax practitioners, taxation authorities, and academic researchers in the field of international tax law and policy will greatly appreciate the book’s forthright enhancement of the ability to defend challenges based on the nexus doctrine.




Federalism and State Business Activity Tax Nexus


Book Description

The author suggests that Public Law 86-272, a 1959 federal law that preempts a state net income tax imposed as to a business that limits its contacts with the state to in-state solicitation of sales of tangible personal property delivered from a point located outside the state, is unconstitutional under the Supreme Court's current view of federalism. Therefore, proposed federal statutes that would expand the preemptive breadth of Public Law 86-272 to addtitional types of state taxes and to a greater breadth of in-state business activity would also be unconstitutional.




Do States' Interpretations of Nexus Activities Align with States' Policy Adoptions of Economic Nexus?


Book Description

While the 1992 Supreme Court case Quill vs. North Dakota, 112 S.Ct. 1904 (1992), re-affirmed a bright-line, physical presence nexus standard for sales and use tax purposes, the court case explicitly left open the question of whether the same nexus standard applied to state corporate income taxes. The state taxation literature has extensively examined state corporate income tax characteristics and revenue implications; however, little research has focused on which types of corporate activities result in a state asserting nexus. Using data from the BNA Survey of State Tax Departments, this study investigates 95 nexus-creating activities as reported by states from 2002-2010 and their association with states' adoption of economic nexus. In other words, we seek to better understand which nexus-creating activities of businesses drive the corporate income tax economic nexus adoption by states. Through a unique use of both behavioral survey data and archival data, we provide a rich picture of how state policy adoptions of economic nexus align with state interpretations or perceptions. Results show that economic nexus adoptions are more common in states that perceive investment in pass-through entities, licensing intangibles, engaging in financial activities, or inspecting installation as creating nexus within the state, and are less likely in states that view attending trade shows or checking customer inventories as creating nexus. These results contribute to the state taxation literature by providing evidence of the primary activities that contribute to the economic nexus standard, which have implications for state tax researchers and policymakers alike.







State Tax Jurisdiction: Establishing Nexus for Business Activity Taxes


Book Description

This research examines the nexus standards for business activity taxes at the state level in the United States. While some states determine nexus under the U.S. Commerce Clause based on a physical presence test, other states determine nexus using an economic presence test. This lack of uniformity presents problems for multistate taxpayers. To address this issue, the U.S. Congress must enact legislation establishing a uniform nexus standard for business activity taxes




Bat Nexus Bill Would Undermine State Corporate Taxes and Harm the Economy


Book Description

The author criticizes H.R. 3220, a business activity nexus bill, saying it would stimulate a new wave of corporate tax sheltering. The bill would unfairly deprive states of the right to tax particular corporations on income earned in those states, the author says.







The Engineering-Business Nexus


Book Description

Fascinating and compelling in equal measure this volume presents a critical examination of the multilayered relationships between engineering and business. In so doing the study also stimulates ethical reflection on how these relationships either enhance or inhibit strategies to address vital issues of our time. In the context of geopolitical, economic, and environmental tendencies the authors explore the world that we should want to create and the role of the engineer and the business manager in this endeavor. Throughout this volume the authors identify periods of alignment and periods of tension between engineering and business. They look at focal points of the engineering-business nexus related to the development of capitalism. The book explores past and present movements to reshape, reform, or reject this nexus. The volume is informed by questions of importance for industry as well as for higher education. These are: What kinds of conflict arise for engineers in their attempts to straddle both professional and organizational commitments? How should professionals be managed to avoid a clash of managerial and professional cultures? How do engineers create value in firms and corporations? What kinds of tension exist between higher education and industry? What challenges does the neoliberal entrepreneurial university pose for management, faculty, students, society, and industry? Should engineering graduates be ready for work, and can they possibly be? What kinds of business issues are reflected in engineering education curricula, and for what purpose? Is there a limit to the degree of business hybridization in engineering degree programs, and if so, what would be the criterion for its definition? Is there a place in engineering education curricula for reflective critique of assumptions related to business and economic thinking? One ideal of management and control comes to the fore as the Anthropocene - the world transformed into an engineered artefact which includes human existence. The volume raises the question as to how engineering and business together should be considered, given the fact that the current engineering-business nexus remains embedded within an economic model of continual growth. By addressing macro-level issues such as energy policy, sustainable development, globalization, and social justice this study will both help create awareness and stimulate development of self-knowledge among practitioners, educators, and students thereby ultimately addressing the need for better informed citizens to safeguard planet Earth as a human life supporting system.