In a new policy brief, we look at Washington’s Steady Move to an Economic Nexus Standard for Taxes.

Briefly:

• “Nexus” means a connection, and it is a determinant of jurisdiction in tax law.
• Federal law is unclear as to whether a state may tax businesses without a physical presence in the state.
• Washington has used an economic nexus test for certain businesses in recent years (based on their market in the state).
• Several nexus changes have been proposed this legislative session.
• The constitutionality of the nexus changes has not been determined.