The APA’s Government Relations Task Force released its report, Employees Are Where? Presence, Nexus, and Employment Taxes: A Payroll Analysis. The report can be downloaded from APA’s website on the Hot Topics—Multi-State Taxation page.
The report provides an overview of existing state and local laws and regulations on business nexus and employment tax withholding and reporting. The report is intended to help payroll professionals and their employers identify business nexus and tax withholding challenges.
Identifying State and Local Tax Jurisdictions
Employee work locations are an underlying criterion by which state and local governments identify business nexus. When business nexus is imposed, employers generally are obligated to file returns and pay corporate/business income taxes and other taxes.
Employers must find a way to clearly identify where employees are located during all hours they work, and payroll management also must track differing state and local requirements, such as the length of time in a state that an employee must work to trigger state tax withholding.
Payroll management also must track differing state and local requirements, such as the length of time in a state that an employee must work to trigger state tax withholding.
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Mike Linehan is the Assistant Manager of Government Relations for the APA.