Massachusetts recently joined a handful of other states (read: States over the Edge and Testing Boundaries with Business Activity Tax Nexus) by issuing a final revised regulation adopting a bright-line, $500,000, nexus threshold for its corporate excise tax. See generally 830 CMR 63.39.1. Echoing the language of the Wayfair decision, the stateâs revised nexus regulation provides that âthe Commissioner will presume that a general business corporation’s virtual and economic contacts subject the corporation to the tax jurisdiction of Massachusetts under M.G.L. c. 63, § 39, where the volume of the corporation’s Massachusetts sales for the taxable year exceeds five hundred thousand dollars.â 830 CMR 63.39.1(3)(d).
In a decision that may foretell the future of business privilege tax nexus, the Washington Supreme Court in November upheld the imposition of the stateâs business & occupation (B&O) tax on an out-of-state distributor with respect to sales that were not generated by the distributorâs in-state office. In Avnet Inc. v. Depât of Rev., Dkt. No. 92080-0 (Wash. 2016), the Court effectively killed any notion that transactional nexus is required to impose the B&O taxâa tax on the privilege of doing business in Washington. This case, coupled with the Ohio Supreme Courtâs decision in Crutchfield v. Testa, which was decided one week before Avnet and involved Ohioâs similar Commercial Activity Tax (CAT), continue the trend of aggressively pursuing nexus in the business privilege tax context.