Manage Your Sales Tax Exposure with a Nexus Study

A comprehensive analysis of your company’s state and local tax filing footprint

Nexus Study Basics

What is a Nexus Study?

Leyton’s initial approach to the development of a robust SALT strategy generally take the form of a “Nexus Study”: an in-depth analysis about whether your business has sufficient connections (or, Nexus) in a state to trigger the requirement to pay state taxes, including sales & use tax, income/franchise tax, employment tax, excise tax, and any other relevant state taxes.

Every growth-minded business needs a State & Local Tax (SALT) strategy, and the first step to ensuring your business is positioned well from a SALT standpoint is determining which state taxes it should be filing, and where it should be filing them.

Nexus Benefits

Why is a Nexus Study Important for Businesses?

Identify Your Tax Obligations

Determine where your business has established sales tax nexus based on physical presence, economic activity, employees, or inventory, helping you understand your compliance requirements.

Reduce Compliance Risk

A Nexus Study helps identify states where registration and tax collection may be required, reducing the risk of audits, penalties, and unexpected tax liabilities.

Support Business Growth

As your business expands into new markets, a Nexus Study ensures your tax strategy keeps pace with changing operations, sales channels, and state regulations.

Build a Compliance Roadmap

Receive a clear assessment of your nexus footprint along with practical recommendations for registration, filing, and ongoing sales tax compliance across multiple jurisdictions.

Why Leyton

Trusted State & Local Tax Advisor

29+

Years Serving Businesses

Countries

States Supported

100M+

Saved on Tax

How it helps

What Triggers Sales Tax Nexus?

A business can establish sales tax nexus through physical presence, economic activity, affiliate relationships, or referral arrangements. Because nexus rules vary by state, understanding where your business has tax obligations is essential to maintaining compliance.

Physical Nexus

Physical nexus is created when a business has a physical presence in a state, such as property, inventory, employees, or business activities like sales, services, or trade shows. Although economic nexus rules were introduced after the Wayfair decision, physical presence remains a key factor in determining state sales tax obligations.

Economic Nexus

Economic nexus is established when a business exceeds a state’s sales or transaction threshold, even without a physical presence. While most states have adopted economic nexus laws, each state sets its own thresholds and registration requirements, making regular nexus reviews essential for compliance.

Affiliate Nexus

Affiliate nexus is established when an out-of-state business has a qualifying relationship with an in-state affiliate. Because the rules and qualifying relationships vary by state, businesses should evaluate their affiliate activities to determine potential sales tax obligations.

Click-Through Nexus

Click-through nexus is established when an out-of-state business compensates in-state individuals or businesses for referring customers through website links or similar arrangements. Many states apply sales or referral thresholds before this type of nexus creates a sales tax obligation.

Our Approach

How Leyton Helps

We combine technical SALT expertise with a proven methodology to evaluate your nexus footprint, identify potential tax obligations, and develop a practical roadmap for multi-state compliance.

01.

Discovery

We begin by understanding your business operations, including your physical locations, employees, inventory, sales channels, and revenue by state to identify potential nexus triggers.

02.

Nexus Assessment

Our SALT specialists analyze your activities against each state’s economic and physical nexus rules to determine where registration and sales tax obligations may exist.

03.

Strategic Recommendations

You’ll receive a comprehensive nexus memorandum outlining our findings, the methodology used, identified risks, and recommended next steps for compliance and risk mitigation.

04.

Compliance Support

If nexus is established, our team can assist with state registrations, filing strategies, and ongoing compliance to help your business remain compliant as it grows.

Trusted State & Local Tax Advisor

Hear From Our Clients

Supporting clients through every step of their State and Local Tax foot print.

Jeremy Dellaria

President
@Grass365

“I cannot state how much Brian Ess and Leyton helped my business. We had a very unique tax situation that was hard to gauge by multiple tax advisors. We knew we had an issue that had to be solved and the brevity of the situation was a very large number for our company to absorb. Brian and his team were able to guide us through and negotiate on our behalf with the state. Their navigation was so much better than we could have hoped for. We settled for something like pennies on the dollar. I would highly recommend Brian and Leyton to help anyone out with local state tax guidance. Thank you Brian I’d kiss you if l could!”

Carson Clement

Co-founder
@Oh Clementine

“The Leyton team has demonstrated great attention to detail and competence in helping us with our state and local tax management. Brian and Grace have been easy to work with, proactive communicators, and very accessible. Highly recommend for any business trying to navigate sales tax compliance, VDAs, and more.”

Gillian Grant

Owner
@Lost Artistry Lash

“The Leyton team, and especially Brian, have been super helpful over the years with all our international sales tax needs. Would highly recommend.”

Get in Touch

Schedule a Free Consultation

Leyton’s State & Local Tax (SALT) experts collaborate with your accountants and automation solutions to ensure that your business has its SALT affairs in order, providing accurate insights that enable sustainable business growth.

FAQs

Frequently Asked Questions

Can’t find the answer you’re after? Please contact our team

How often should businesses update or revisit their Nexus Studies?

Businesses should update or revisit Nexus Studies regularly, perhaps even semi-annually or quarterly, especially when expanding operations into new states or when there are significant changes in business activities that may affect nexus determinations.

What are the benefits of conducting a Nexus Study proactively?

Proactively conducting a Nexus Study helps businesses avoid unexpected tax liabilities, penalties, and interest by identifying and addressing potential nexus issues in advance.

What are some common misconceptions about Nexus and Nexus Studies?

Common misconceptions include believing that only physical presence triggers nexus or assuming that low sales volume exempts a business from tax obligations.

Does online sales activity create Nexus with a state?

Yes, significant online sales activity can create nexus with a state, depending on the state’s laws. This can include sales volume thresholds or other economic factors.