Companies Avoid Paying Billions in Taxes (Yahoo article) is a case on Nexus

Tax planning can save you money.  It depends on which state you live in and which states your employer is in to do business  According to the article on Yahoo, “Apple avoids paying billions in taxes” simply because they locate some of the subsidiaries in other states or countries where there are no taxes or where the tax rate is lower.  My question is “Isn’t it wise for a company to locate or be in a State where taxes are lower?  I look forward to seeing your comments?    The link to the article can be found here:

Where you and your company is located at is called Nexus.   There are varying degrees of Nexus.  Nexus can be created usually when you have some type of presence in a state.  This can be delivery trucks crossing over into a state, service calls being performed , an employee working for you in another state, or having an agent acting on behalf of you. Some states have even gone on to describe Nexus has having an affiliation.  If you have nexus, the states look at sales, payroll, and property located in the state to determine what portion of the income should be apportioned to the state should be.  In Pennsylvania, I have heard of a concrete manufacturer who can not have the concrete rotating in the concrete trucks when they pass over into New York simply because New York will define the trucks as a manufacturing plant if the concrete is rotating in the truck.  As I indicated above, the Nexus rules vary from state to state and with the state.  With the states needing needing new revenue streams, auditors have stepped up their efforts to find companies that have Nexus.

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