Nexus: A Four-Point Refresher

Promotional activities can create nexus, even if the agent-promoter isn’t authorized to take customer orders. An agency relationship also can result from contracting with an in-state company to provide after-sale services to consumers.

For example, some direct marketers of computers and electronic equipment offer their customers on-site installation and repair services, which actually are performed by local contractors. Unless the relationship is structured carefully, the in-state service provider will be treated as the retailer’s agent for nexus purposes. Another illustration of an agency relationship is when a remote seller authorizes an in-state company to accept product returns and issue customer refunds on its behalf.