The term “NEXUS” in taxation refers to a company’s link to or presence in a specific state, which obligates it to pay taxes in accordance with state regulations. In other words, NEXUS refers to a company’s actual physical presence in a state as defined by law. A company must pay taxes on its sales in a state where it has NEXUS if it wants to operate there.
For instance, if a company has a physical location in California, it also has NEXUS there. As a result, it is obligated to pay California taxes on all of its in-state sales. Similar to this, a company is said to have NEXUS in a state if it has employees there who work remotely.
In Utah, if no sales tax has been paid, goods and services are subject to use tax. In Utah, the use tax rate is the same as the current sales tax rate of 4.85%. Businesses that have made purchases from out-of-state vendors or received products or services that were exempt from sales tax are typically responsible for paying the use tax. What percentage of tax do I charge my customers?
The location of both your business and your clients affects the tax rate you charge them. You must include sales tax to all taxable sales you make to consumers in states where there is a sales tax if your company is based there. The sales tax rate in your state is the same as the tax rate you charge your consumers.
Sales tax is not necessary to be included to purchases made from clients in a state where your company does not have a physical presence or NEXUS, though. It is significant to remember that NEXUS and sales tax regulations differ by state, thus it is always advised to speak with a tax expert to assure compliance.
In conclusion, firms must comprehend the importance of NEXUS in order to comply with state tax rules. A company must pay taxes on sales it makes in that state if it has NEXUS in that state. In Utah, the use tax rate is the same as the current sales tax rate of 4.85%. It is always advised to speak with a tax specialist to ensure compliance because the tax rate you charge your customers depends on both the location of your business and the location of your clients.