Does Hosting Conference Trigger Nexus? – Compliance Q&A
- Sales and Use Tax
- Mar 21, 2016 | Gail Cole
Instead of one tax authority, such as a state department of revenue, home rule states have multiple tax authorities. Sales tax compliance is always a bit of a hassle, but in home rule states, it can quickly devolve into a nightmare.
Here’s a question from our forum about sales tax compliance in the home rule state of Louisiana: We are a Texas corporation and make online sales throughout Louisiana. We are planning to host a conference in New Orleans and know we need to register with the state and with Orleans Parish, where New Orleans is located. Do we also need to register with other Louisiana parishes?
As a home rule state, Louisiana has local sales tax bases (parishes) that collect local sales and use taxes and perform audits. State law (Article VI, Part 1, §29) authorizes local governments to levy and collect sales and use tax, “if approved by a majority of the electors voting thereon in an election held for that purpose.” Every parish is therefore a unique taxing entity that is self-administered.
A conference in New Orleans will create nexus in Orleans Parish. The questioner is right to wonder if a physical presence in New Orleans during the conference will trigger a sales tax obligation in other Louisiana parishes where the business has online customers. It could. In order to determine if it’s necessary to register in the other parishes where sales are made, the seller should contact the parishes directly. They’ll know if business activity in New Orleans triggers nexus in that parish.
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