Have we established nexus if our rep in California only generate leads and does not accept orders?

Though your sales reps only generate leads and do not accept orders, they still represent your organization. According to a Board of Equalization (BOE) tax specialist, if your sales rep is in California to solicit, promote or advertise your business, your company has nexus.

You might find a BOE publication, Out-of-State Sellers: Do You Need to Register with California? helpful. It notes that “Retailers based outside California are required to pay California sales or use tax on sales of merchandise to California customers if they are ‘engaged in business’ in the state and must register to pay sales and/or use tax.”

Each state has its own rules, regulations and definitions, which are subject to change. The ARO2C site will soon launch a sales and use tax calculator tool; stay tuned.

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