State-by-State Guide: Where Will Hiring Independent Contractors Create Sales Tax Nexus?

by | May 20, 2021

This article attempts to determine the stances of the states with regard to whether independent contractors create sales tax nexus. In many states, it depends on the types of activities that contractors perform and sometimes it depends on the extent to which the contractor is under your authority. In almost all states, having a contractor that is performing the duty of a sales agent would create sales tax nexus, but other activities such as warranty repairs only sometimes create sales tax nexus.

 

Wait… what’s sales tax nexus? Sales tax nexus is a substantial connection between a business and a state which would require the business to collect sales tax. Typically and historically, sales tax nexus has been established by a company’s physical presence in the state. Physical presence can be simple to determine if you own a business location in the state or you have employees in the state, but it is trickier to navigate when you have contractors in other states (agents or representatives that you compensate for their services, but are not considered an employee of your company).

Another thing to keep in mind with regard to sales tax nexus is economic nexus. Economic nexus is a new concept that was created as a result of the South Dakota v. Wayfair case. Since the case was decided in the U.S. Supreme Court in 2018, forty-three states and the District of Columbia have created economic nexus laws, which require out-of-state sellers to register to collect sales tax if they meet certain gross receipts or transaction thresholds. Sometimes these laws supersede previous laws regarding out-of-state sellers having nexus in the state. It appears this is the case for a couple of states. You can see each state’s economic nexus thresholds by clicking here.

 

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Alabama

Will hiring independent contractors create sales tax nexus for you in Alabama?

Hiring independent contractors generally creates sales tax nexus for you in Alabama.

 

Why will hiring independent contractors generally create sales tax nexus for you in Alabama?

Alabama generally requires any sellers who have independent contractors in the state of Alabama for the purpose of making a sale or creating a profit to register and collect sales tax due to substantial nexus with the state. Alabama also believes that using any kind of contractors would be maintaining a presence in the state even though you may not have employees in the state. This comes from a ruling in Graduate Supply House, Inc. 1620 N. Mill Street Jackson, MS 39202-1535, Taxpayer, v. State Of Alabama Department Of Revenue., S. 05-751, 11/20/2007 that stated the Quill Corp. v. North Dakota ruling allowed for states to create a substantial nexus requirement with sellers which had independent contractors in their state.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Alabama?

You can learn more about how contractors can create sales tax nexus in Alabama by reading Ala. Code § 40-23-68(3) and Ala. Code § 40-23-68(9).


 

Arizona

Will hiring independent contractors create sales tax nexus for you in Arizona?

Hiring independent contractors generally creates sales tax nexus for you in Arizona.

 

Why will hiring independent contractors generally create sales tax nexus for you in Arizona?

Arizona ruled in 2016 that independent contractors in the state of Arizona would satisfy the substantial nexus requirement as long as that independent contractor resides in the state of Arizona for two days or more in a given year. This would apply to all contractors regardless of the activity for which they perform. However, when the economic nexus laws were passed in 2019, this ruling has since been rescinded. Yet, since economic nexus is typically a completely different subject, it would seem reasonable to expect that the previous ruling regarding independent contractors is still consistent with the current interpretation of Arizona’s laws.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Arizona?

You can learn more about how contractors can create sales tax nexus in Arizona by reading the Recession of Arizona TPT Ruling 16-1.


 

Arkansas

Will hiring independent contractors create sales tax nexus for you in Arkansas?

Hiring independent contractors generally creates sales tax nexus for you in Arkansas.

 

Why will hiring independent contractors generally create sales tax nexus for you in Arkansas?

Arkansas generally requires any sellers who have independent contractors in the state of Arkansas for the purpose of making a sale or creating a profit to register and collect sales tax due to substantial nexus with the state. Further, even if the contractor is just facilitating a transfer of goods without the transfer of money, that contractor would be creating substantial nexus for the seller. It is unclear however if a contractor in Arkansas that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Arkansas?

You can learn more about how contractors can create sales tax nexus in Arkansas by reading Ark. Code Ann. § 26-52-103(14)(A).


 

California

Will hiring independent contractors create sales tax nexus for you in California?

Hiring contractors will generally  create sales tax nexus for you in California if you are a retailer.

 

Why will hiring independent contractors generally create sales tax nexus for you in California?

California generally requires any retailers who have independent contractors in California “for the purpose of selling, delivering, installing, assembling, or the taking of orders for any tangible personal property” to register and collect sales tax due to substantial nexus with the state. It is worth noting that this requirement is for retailers specifically and not just any seller, so if you do not sell to an end-user, these rules may not apply to you. It is also unclear however if a contractor in California that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in California?

You can learn more about how contractors can create sales tax nexus in California by reading Cal. Rev. & Tax. Cd. § 6203(c)(2).


 

Colorado

Will hiring independent contractors create sales tax nexus for you in Colorado?

Hiring independent contractors generally creates sales tax nexus for you in Colorado.

 

Why will hiring independent contractors generally create sales tax nexus for you in Colorado?

Colorado generally requires any sellers who have independent contractors in the state of Colorado for the purpose of making a sale or creating a profit to register and collect sales tax due to substantial nexus with the state (specifically having “direct representatives, indirect representatives or manufacturers’ agents” in the state). It is unclear however if a contractor in Colorado that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Colorado?

You can learn more about how contractors can create sales tax nexus in Colorado by reading Colo. Rev. Stat. § 39-26-102(3) or by reading Colorado’s Sales Tax Guide.


 

Connecticut

Will hiring independent contractors create sales tax nexus for you in Connecticut?

Hiring independent contractors generally creates sales tax nexus for you in Connecticut.

 

Why will hiring independent contractors generally create sales tax nexus for you in Connecticut?

Connecticut generally requires any sellers who have independent contractors in the state of Connecticut for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. In addition, the laws in Connecticut also create substantial nexus for any seller who has a contractor for the purpose of maintaining an office, warehouse, or other place of distribution or sample room or place. Contractors who enter the state to repair or service any items under warranty also create substantial nexus for the seller. It is unclear however if a contractor in Connecticut that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Connecticut?

You can learn more about how contractors can create sales tax nexus in Connecticut by reading Conn. Gen. Stat. § 12-407(a)(15)(A)(iv) and Conn. Gen. Stat. § 12-407(a)(15)(A)(ix) or by reading Scholastic Book Clubs, Inc. v. Comm’r of Revenue Servs., 304 Conn 204 38 A3d 1183, 03/27/2012, which describes how persons who might not even be described as independent contractors can create sales tax nexus.


 

District of Columbia

Will hiring independent contractors create sales tax nexus for you in the District of Columbia?

Hiring independent contractors generally creates sales tax nexus for you in the District of Columbia.

 

Why will hiring independent contractors generally create sales tax nexus for you in the District of Columbia?

The District of Columbia generally requires any sellers who have contractors (salesmen, representatives, peddlers, agents, dealers, etc.) in the District of Columbia for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. In addition, the laws in the District of Columbia also create substantial nexus for any seller who has a contractor for the purpose of maintaining an office, warehouse, or other place of distribution or sample room or place. It is unclear however if a contractor in the District of Columbia that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in the District of Columbia?

You can learn more about how contractors can create sales tax nexus in the District of Columbia by reading D.C. Code Ann. § 47-2201(g) and D.C. Code Ann. § 47-2201(h).


 

Florida

Will hiring independent contractors create sales tax nexus for you in Florida?

Hiring independent contractors generally creates sales tax nexus for you in Florida.

 

Why will hiring independent contractors generally create sales tax nexus for you in Florida?

Florida generally requires any sellers who have contractors (sales agents) in the state of Florida for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. In addition, the laws in Florida also create nexus for any seller who has a sufficient relationship with any of the residents of the state of Florida that would create substantial nexus. Contractors who enter the state to repair or service any items under warranty also create substantial nexus for the seller. It is unclear however if a contractor in Florida that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Florida?

You can learn more about how contractors can create sales tax nexus in Florida by reading Fla. Stat. § 212.0596(2)(c) and Fla. Stat. § 212.0596(2)(l), Fla. Admin. Code Ann. 12A-1.105(1)(a), or Fla. Admin. Code Ann. 12A-1.060.


 

Georgia

Will hiring independent contractors create sales tax nexus for you in Georgia?

Hiring independent contractors generally creates sales tax nexus for you in Georgia.

 

Why will hiring independent contractors generally create sales tax nexus for you in Georgia?

Georgia generally requires any sellers who have contractors (sales agents) in the state of Georgia for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. In addition, the laws in Georgia also create substantial nexus for any seller who conducts any activities that would be significantly associated with the seller’s ability to establish and maintain a market in the state of Georgia. Also, contractors who enter the state to repair or service any items under warranty also create substantial nexus for the seller. It is unclear however if a contractor in Georgia that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Georgia?

You can learn more about how contractors can create sales tax nexus in Georgia by reading Ga. Code Ann. § 48-8-2(8)(H) and Ga. Code Ann. § 48-8-2(8)(L).


 

Hawaii

Will hiring independent contractors create sales tax nexus for you in Hawaii?

Hiring independent contractors generally creates sales tax nexus for you in Hawaii.

 

Why will hiring independent contractors generally creates sales tax nexus for you in Hawaii?

Hawaii generally requires any sellers who have independent contractors in the state of Hawaii for the purpose of generating sales, net profit, or gross receipts to register and collect sales tax due to substantial nexus with the state. Specifically, Hawaii judged in 1995 that contractors who were performing warranty repair services in the state created substantial nexus for the company which the contractors were representing. Outside of this specific example, it is not one hundred percent certain that any other specific type of contractor would create substantial nexus. However, given the reasoning behind the 1995 ruling – for the purpose of generating sales, net profit, or gross receipts – it would seem likely that most contractors would create substantial nexus for the company they represent.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Hawaii?

You can learn more about how contractors can create sales tax nexus in Hawaii by reading Hawaii Tax Information Release No. 96-1, 01/24/1996, which is the information release following the December 20, 1995 ruling.


 

 

Free State Audit Risk Guide

See which states pose the greatest risk to your business.

State-by-State Audit Risk Percentages

Idaho

Will hiring independent contractors create sales tax nexus for you in Idaho?

Hiring independent contractors generally creates sales tax nexus for you in Idaho.

 

Why will hiring independent contractors generally create sales tax nexus for you in Idaho?

Idaho generally requires any sellers who have independent contractors in the state of Idaho for the purpose of generating sales, deliveries, or taking orders for personal tangible property in the state to register and collect sales tax due to substantial nexus with the state. These activities were further validated as nexus creating activities by a 1994 ruling in the state (Idaho State Tax Commission Ruling, No. 7082, 06/29/1994). In addition, installing or servicing personal tangible property in the state can also create substantial nexus in Idaho. It is unclear however if a contractor in Idaho that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Idaho?

You can learn more about how contractors can create sales tax nexus in Idaho by reading Idaho Code § 63-3611(3)(b).


 

Illinois

Will hiring independent contractors create sales tax nexus for you in Illinois?

Hiring independent contractors generally creates sales tax nexus for you in Illinois.

 

Why will hiring independent contractors generally create sales tax nexus for you in Illinois?

Illinois generally requires any sellers who have independent contractors in the state of Illinois for the purpose of generating sales, deliveries, or taking orders for personal tangible property in the state for which the sales agent receives a commission to register and collect sales tax due to substantial nexus with the state. Further, it appears Illinois believes that any agent regardless of what activities are being carried out, regardless of whether the agent is temporary or permanent, or regardless of whether the agent is licensed in the state or not, to create substantial nexus by their presence in the state and the fact that they are representing your company by being under your authority.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Illinois?

You can learn more about how contractors can create sales tax nexus in Illinois by reading ILCS § 105/2 and Ill. Admin. Code 150.201.


 

Indiana

Will hiring independent contractors create sales tax nexus for you in Indiana?

Hiring independent contractors generally creates sales tax nexus for you in Indiana.

 

Why will hiring independent contractors generally create sales tax nexus for you in Indiana?

Indiana generally requires any sellers who have independent contractors in the state of Indiana for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing or servicing personal tangible property in the state can also create substantial nexus in Indiana. Even invoicing and billing for property or services to be used in Indiana can create substantial nexus. It is unclear however if a contractor in Indiana that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Indiana?

You can learn more about how contractors can create sales tax nexus in Indiana by reading Ind. Code § 6-2.5-2-1(c).


 

Iowa

Will hiring independent contractors create sales tax nexus for you in Iowa?

Hiring independent contractors generally creates sales tax nexus for you in Iowa.

 

Why will hiring independent contractors generally create sales tax nexus for you in Iowa?

Iowa generally requires any sellers who have independent contractors in the state of Iowa for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. In addition, the laws in Iowa also create substantial nexus for any seller who conducts any activities that would be significantly associated with the seller’s ability to establish and maintain a market in the state of Iowa. Also, any sellers who enter the state to install, repair, or service any physical tangible property also create substantial nexus. It is unclear however if it would also apply to contractors doing that same type of work (installing, repairing, or servicing physical tangible property). Also, it is unclear if a contractor in Iowa that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Iowa?

You can learn more about how contractors can create sales tax nexus in Iowa by reading Iowa Code § 423.1(48) and Iowa Admin. Code § 701–30.1(1).


 

Kansas

Will hiring independent contractors create sales tax nexus for you in Kansas?

Hiring independent contractors generally create sales tax nexus for you in Kansas.

 

Why will hiring independent contractors generally create sales tax nexus for you in Kansas?

Kansas generally requires any sellers who have independent contractors in the state of Kansas for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. In addition, any contractors who enter the state to repair or service any items under warranty or install any physical tangible property would also create substantial nexus for the seller. Kansas also states that if the retailer has any contact with the state that The U.S. Constitution would allow Kansas to enforce nexus with the retailer, the retailer would have nexus with Kansas. It is unclear however if a contractor in Kansas that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Kansas?

You can learn more about how contractors can create sales tax nexus in Kansas by reading Kan. Stat. Ann. § 79-3702(h),  Kan. Admin. Regs. § 92-20-7, and Kansas Information Guide No. KS-1510, , 12/31/2020.


 

Kentucky

Will hiring independent contractors create sales tax nexus for you in Kentucky?

Hiring independent contractors generally creates sales tax nexus for you in Kentucky.

 

Why will hiring independent contractors generally create sales tax nexus for you in Kentucky?

Kentucky generally requires any sellers who have independent contractors in the state of Kentucky for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. In addition, the laws in Kentucky also create substantial nexus for any seller who conducts any activities that would be significantly associated with the seller’s ability to establish and maintain a market in the state of Kentucky regardless of whether that contractor is part-time or full-time. Even a contractor whose sole responsibility is to repair or service merchandise or to receive or exchange returned merchandise can create substantial nexus for an out-of-state retailer. It is unclear however if a contractor in Kentucky that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Kentucky?

You can learn more about how contractors can create sales tax nexus in Kentucky by reading Ky. Rev. Stat. Ann. § 139.340(2).


 

Louisiana

Will hiring independent contractors create sales tax nexus for you in Louisiana?

Hiring independent contractors generally creates sales tax nexus for you in Louisiana.

 

Why will hiring independent contractors generally create sales tax nexus for you in Louisiana?

Louisiana generally requires any sellers who have independent contractors in the state of Louisiana for the purpose of establishing and maintaining a market for the retailer in Louisiana to register and collect sales tax due to substantial nexus with the state. This has been heavily debated in Louisiana as evidenced by two rulings each dealing with a retailer having a contractor performing computer repair services but both rulings ended up having different conclusions on the matter. In one case in 2001, it was determined those computer repair services were not for the purpose of establishing and maintaining a market for the retailer (Quantex). In another case in 2006, it was determined that computer repair services were for the purpose of establishing and maintaining a market for the retailer (Dell) and that the retailer would thereby have substantial nexus with the state of Louisiana.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Louisiana?

You can learn more about how contractors can create sales tax nexus in Louisiana by reading State of Louisiana and Secretary of the Department of Revenue and Taxation, v. Quantex Microsystems, Inc., 809 So 2d 246, 07/03/2001 and by reading State of Louisiana and Secretary of the Department of Revenue and Taxation v. Dell International, Inc., et al., 922 So 2d 1257, 02/15/2006.


 

Free State Audit Risk Guide

See which states pose the greatest risk to your business.

State-by-State Audit Risk Percentages

Maine

Will hiring independent contractors create sales tax nexus for you in Maine?

Hiring independent contractors generally creates sales tax nexus for you in Maine.

 

Why will hiring independent contractors generally create sales tax nexus for you in Maine?

Maine generally requires any sellers who have independent contractors in the state of Maine for the purpose of making a sale or delivering or taking orders to register and collect sales tax due to substantial nexus with the state. Maine also states that if the retailer has any contact with the state that The U.S. Constitution would allow Maine to enforce nexus with the retailer, the retailer would have nexus with Maine. It is unclear however if a contractor in Maine that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Maine?

You can learn more about how contractors can create sales tax nexus in Maine by reading  Me. Rev. Stat. Ann. 36 § 1754-B and Maine Instructional Bulletin, No. 43, 11/19/2018.


 

Maryland

Will hiring independent contractors create sales tax nexus for you in Maryland?

Hiring independent contractors generally creates sales tax nexus for you in Maryland.

 

Why will hiring independent contractors generally create sales tax nexus for you in Maryland?

Maryland generally requires any sellers who have independent contractors in the state of Maryland for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in Maryland. Having an agent be responsible for maintaining a place for the storage of products for the sale of that property or taxable services can also create substantial nexus in the state.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Maryland?

You can learn more about how contractors can create sales tax nexus in Maryland by reading Md. Code Ann. Tax-Gen. § 11-701(b) and Md. Code Ann. Tax-Gen. § 11-101(o).


 

Massachusetts

Will hiring independent contractors create sales tax nexus for you in Massachusetts?

Hiring independent contractors generally creates sales tax nexus for you in Massachusetts.

 

Why will hiring independent contractors generally create sales tax nexus for you in Massachusetts?

Massachusetts generally requires any sellers who have independent contractors in the state of Massachusetts for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, delivering personal tangible property or performing taxable services in the state can also create substantial nexus in Massachusetts. It is unclear however if a contractor in Massachusetts that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Massachusetts?

You can learn more about how contractors can create sales tax nexus in Massachusetts by reading Mass. Gen. L. Chapter 64H § 1.


 

Michigan

Will hiring independent contractors create sales tax nexus for you in Michigan?

Hiring independent contractors generally creates sales tax nexus for you in Michigan.

 

Why will hiring independent contractors generally create sales tax nexus for you in Michigan?

Michigan generally requires any sellers who have independent contractors in the state of Michigan for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in Michigan. Using an agent to own, rent, lease, use, or maintain a place of business on your behalf can also create substantial nexus. It is unclear however if a contractor in Michigan that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Michigan?

You can learn more about how contractors can create sales tax nexus in Michigan by reading Michigan Revenue Administrative Bulletin No. 1999-1, 05/12/1999.


 

Minnesota

Will hiring independent contractors create sales tax nexus for you in Minnesota?

Hiring independent contractors generally creates sales tax nexus for you in Minnesota.

 

Why will hiring independent contractors generally create sales tax nexus for you in Minnesota?

Minnesota generally requires any sellers who have independent contractors in the state of Minnesota for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in Minnesota. It is unclear however if a contractor in Minnesota that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Minnesota?

You can learn more about how contractors can create sales tax nexus in Minnesota by reading Minn. Stat. § 297A.66, Subdivision 1(a)(2) and Minnesota Revenue Notice, No. 19-03, 09/30/2019.


 

Mississippi

Will hiring independent contractors create sales tax nexus for you in Mississippi?

Hiring independent contractors generally creates sales tax nexus for you in Mississippi.

 

Why will hiring independent contractors generally create sales tax nexus for you in Mississippi?

Mississippi generally requires any sellers who have independent contractors in the state of Mississippi for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in Mississippi. Any independent contractor who performs taxable services in the state can also create substantial nexus for you in Mississippi. It is unclear however if a contractor in Mississippi that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Mississippi?

You can learn more about how contractors can create sales tax nexus in Mississippi by reading Miss. Code Ann. § 27-67-3(j) and Miss. Code Ann. § 27-65-9(3).


 

Missouri

Will hiring independent contractors create sales tax nexus for you in Missouri?

Hiring independent contractors generally creates sales tax nexus for you in Missouri.

 

Why will hiring independent contractors generally create sales tax nexus for you in Missouri?

Missouri generally requires any sellers who have independent contractors in the state of Missouri for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. If you have a contractor in Missouri that is not a sales agent, you may still be considered “to be doing business in the state” if you meet Missouri’s definition of vendor. Missouri considers any out-of-state business doing more than $500,000 of sales in Missouri and at least $12.5 million of sales in the United States to be a vendor in Missouri. If you are over those two sales thresholds and thereby considered a vendor in Missouri, any independent contractor residing in the state would create substantial nexus for you in Missouri. If you do not meet those thresholds, it is unclear if a contractor who is not performing sales activities would create nexus for you in Missouri.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Missouri?

You can learn more about how contractors can create sales tax nexus in Missouri by reading Mo. Code Regs. 12 § 10-114.100(2)(B).


 

Nebraska

Will hiring independent contractors create sales tax nexus for you in Nebraska?

Hiring independent contractors generally creates sales tax nexus for you in Nebraska.

 

Why will hiring independent contractors generally create sales tax nexus for you in Nebraska?

Nebraska generally requires any sellers who have independent contractors in the state of Nebraska for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, having an independent contractor perform taxable services on your behalf in the state can also create substantial nexus in Nebraska. Contractors performing banking, financing, debt collection, or marketing activities within Nebraska can also create substantial nexus for you as well. It is unclear however if a contractor in Nebraska that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Nebraska?

You can learn more about how contractors can create sales tax nexus in Nebraska by reading Neb. Admin. R. & Regs. § 1-004.02 and Neb. Rev. Stat. § 77-2703.


 

Nevada

Will hiring independent contractors create sales tax nexus for you in Nevada?

Hiring contractors might create sales tax nexus for you in Nevada.

 

Why do contractors generally not create sales tax nexus for you in Nevada?

In general, hiring independent contractors who only make sales in Nevada will not create sales tax nexus. There is the potential that contractors in Nevada could fall within the definition of “engaging in business” in the state which could create sales tax nexus for the business. 

 

Where can you go to learn more about how contractors generally do not create sales tax nexus in Nevada?

You can learn more about how contractors can create sales tax nexus in Nevada by reading Nev. Rev. Stat. § 80.015.


 

New Jersey

Will hiring independent contractors create sales tax nexus for you in New Jersey?

Hiring independent contractors generally creates sales tax nexus for you in New Jersey.

 

Why will hiring independent contractors generally create sales tax nexus for you in New Jersey?

New Jersey generally requires any sellers who have independent contractors in the state of New Jersey for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in New Jersey. Any contractors who work in New Jersey as representatives of your company can create substantial nexus for you in New Jersey. It is unclear however if a contractor in New Jersey that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in New Jersey?

You can learn more about how contractors can create sales tax nexus in New Jersey by reading N.J. Rev. Stat. § 54:32B-2(i) and New Jersey Division of Taxation Technical Bulletin, No. TB-78, 07/30/2015.


 

New Mexico

Will hiring independent contractors create sales tax nexus for you in New Mexico?

Hiring independent contractors generally creates sales tax nexus for you in New Mexico.

 

Why will hiring independent contractors generally create sales tax nexus for you in New Mexico?

New Mexico generally requires any sellers who have independent contractors in the state of New Mexico for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. It is unclear however if a contractor in New Mexico that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in New Mexico?

You can learn more about how contractors can create sales tax nexus in New Mexico by reading NMSA 1978 § 7-9-10 and Dell Catalog Sales L.P. v. Taxation and Revenue Department of the State of New Mexico, 199 P.3d 863, 06/03/2008.


 

New York

Will hiring independent contractors create sales tax nexus for you in New York?

Hiring independent contractors generally creates sales tax nexus for you in New York.

 

Why will hiring independent contractors generally create sales tax nexus for you in New York?

New York generally requires any sellers who have independent contractors in the state of New York for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. It is unclear however if a contractor in New York that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in New York?

You can learn more about how contractors can create sales tax nexus in New York by reading NYCRR 20 § 526.10(a) and N.Y. Tax Law § 1101(b)(8).


 

North Carolina

Will hiring independent contractors create sales tax nexus for you in North Carolina?

Hiring independent contractors generally creates sales tax nexus for you in North Carolina.

 

Why will hiring independent contractors generally create sales tax nexus for you in North Carolina?

North Carolina generally requires any sellers who have independent contractors in the state of North Carolina for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. It is unclear however if a contractor in North Carolina that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in North Carolina?

You can learn more about how contractors can create sales tax nexus in North Carolina by reading N.C. Gen. Stat. § 105-164.3(83).


 

North Dakota

Will hiring independent contractors create sales tax nexus for you in North Dakota?

Hiring independent contractors generally creates sales tax nexus for you in North Dakota.

 

Why will hiring independent contractors generally create sales tax nexus for you in North Dakota?

North Dakota generally requires any sellers who have independent contractors in the state of North Dakota for the purpose of generating sales, deliveries, or taking orders for personal tangible property in the state for which the sales agent receives a commission to register and collect sales tax due to substantial nexus with the state. Further, it appears North Dakota believes that any agent regardless of what activities are being carried out creates substantial nexus by their presence in the state and the fact that they are representing your company by being under your authority.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in North Dakota?

You can learn more about how contractors can create sales tax nexus in North Dakota by reading N.D. Cent. Code § 57-40.2-01(7).


 

Ohio

Will hiring independent contractors create sales tax nexus for you in Ohio?

Hiring independent contractors generally creates sales tax nexus for you in Ohio.

 

Why will hiring independent contractors generally create sales tax nexus for you in Ohio?

Ohio generally requires any sellers who have independent contractors in the state of Ohio for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in Ohio. Any contractors who provide training in the state or otherwise resolve customer complaints or provide customer assistance can also create nexus in the state of Ohio. It is unclear however if a contractor in Ohio that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Ohio?

You can learn more about how contractors can create sales tax nexus in Ohio by reading Ohio Tax Information Release No. ST 2001-01, 10/01/2017.


 

Oklahoma

Will hiring independent contractors create sales tax nexus for you in Oklahoma?

Hiring independent contractors generally creates sales tax nexus for you in Oklahoma.

 

Why will hiring independent contractors generally create sales tax nexus for you in Oklahoma?

Oklahoma generally requires any sellers who have independent contractors in the state of Oklahoma for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in Oklahoma. The laws in Oklahoma also create substantial nexus for any seller who conducts any activities that would be significantly associated with the seller’s ability to establish and maintain a market in the state of Oklahoma. It is unclear however if a contractor in Oklahoma that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Oklahoma?

You can learn more about how contractors can create sales tax nexus in Oklahoma by reading Okla. Admin. Code §  710:65-1-8(b).


 

Pennsylvania

Will hiring independent contractors create sales tax nexus for you in Pennsylvania?

Hiring independent contractors generally creates sales tax nexus for you in Pennsylvania.

 

Why will hiring independent contractors generally create sales tax nexus for you in Pennsylvania?

Pennsylvania generally requires any sellers who have independent contractors in the state of Pennsylvania for the purpose of generating sales, deliveries, or taking orders for personal tangible property or services to register and collect sales tax due to substantial nexus with the state. In addition, installing, servicing, or repairing personal tangible property in the state can also create substantial nexus in Pennsylvania. It is unclear however if a contractor in Pennsylvania that does not exist for those purposes listed above would create substantial nexus.

 

Where can you go to learn more about how hiring independent contractors generally creates sales tax nexus in Pennsylvania?

You can learn more about how contractors can create sales tax nexus in Pennsylvania by reading Pa. Stat. Ann. 72 § 7201(b) and  Pa. Code 61 § 56.1(b).


 

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Disclaimer: Our attorney wanted you to know that no financial, tax, legal advice or opinion is given through this post. All information provided is general in nature and may not apply to your specific situation and is intended for informational and educational purposes only. Information is provided “as is” and without warranty.

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