Online Retailers Beware: States Broaden the Tax Net

More and more state tax audit resources are being devoted to the discovery of taxpayers who aren't registered to collect sales tax. Traditionally these “nexus discovery” units focused on finding taxpayers with some physical presence — e.g., an employee or sales representative — in the state. But now with the expansion of the affiliate nexus concept, even sellers with no physical presence whatsoever in a state may be found to have sales tax nexus and, therefore, a liability for uncollected sales tax.