Some of the states use, in determining whether an out-of-state entity has income tax nexus:

Question

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Some states use a factor-presence test, which determines whether an out-of-state entity has income tax nexus based on a physical presence in the state, such as having property, employees or sales in the state. Other states use an economic presence test, which determines nexus based on a certain amount of sales or transactions in the state, regardless of physical presence. Some states use both tests to determine nexus. Therefore, both a. and b. are used by certain states.

Some of the States Use, in Determining Whether an Out-Of-State