How to Conduct a Nexus Self-Audit

Catalogers can’t reduce their nexus exposure unless they first identify their nexus risks. Many CEOs and CFOs are unaware of their own company’s various affiliate marketing programs, cross-promotion initiatives, vendor drop-ship relationships and other activities that carry a nexus risk.

Senior managers also may be lulled into the false belief that a relatively small amount of in-state activity isn’t enough to cross the nexus threshold. Even a very limited physical presence in a state, however, may be sufficient to create a tax-collection obligation on all sales to consumers in that state.