Businesses engaged in interstate commerce are subject to income tax in every state in which they operate.
Businesses engaged in interstate commerce are only subject to tax where they have nexus.

Question

Quizplus · Accepted Answer

Businesses engaged in interstate commerce are only subject to tax in states where they have nexus, meaning a connection or presence in that state. The Supreme Court case South Dakota v. Wayfair (2018) clarified that states can only tax businesses with nexus, overturning the previous physical presence standard. However, businesses may still be subject to various other taxes, such as sales tax, in states where they do not have nexus.

Businesses Engaged in Interstate Commerce Are Subject to Income Tax