April 17, 2020

Telecommuting Nexus Rules Suspended

By John Bonk, Director, Tax & Business Services & Alex Toback, Staff Accountant, Tax & Business Services

Telecommuting Nexus Rules Suspended State & Local Tax

As many people have been following the stay-at-home orders issued across the country, telecommuting has become the new norm. Inadvertently, sheltering-in-place has the effect in many states of forcing companies to create nexus.

Generally, a business is considered to create nexus—basically, a connection in a state that creates a tax return filing obligation — if it has employees working in the state. As telecommuting has become more prevalent, many states have ruled that telecommuting does create nexus, while others have released guidance suspending the telecommuting rule.

The District of Columbia, Indiana, Minnesota, Mississippi, New Jersey, and Pennsylvania have all released specific telecommuting guidance pertaining to COVID-19. If employees are temporarily working from home as a matter of safety and public health, these states will not seek to impose nexus solely on the basis of the temporary activity occurring, for the duration of this emergency.

While many jurisdictions have not directly ruled upon the suspension of nexus rules covering telecommuting, it is expected that more states will release guidance in the upcoming weeks as relates to nexus issues.

Marcum State and Local Tax professional to address any questions regarding the telecommuting effect on nexus or any other tax matter. For more information concerning the coronavirus, see the Marcum Coronavirus Resource Center.

For further assistance or questions regarding the telecommuting effect on nexus, please contact your Marcum State and Local Tax professional or contact John Bonk at 954.320.8112 or email John.

Coronavirus Resource Center

Have more questions about the impact of the coronavirus on your business? Visit Marcum’s Coronavirus Resource Center for up-to-date information.