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We have nexus in 15 states and have begun obtaining sales tax licenses in each. We were told we need a (registered) agent in each.

Full Question: We have nexus in 15 states with independent reps making sales calls there, etc. We have begun obtaining sales tax licenses in each nexus state. Someone told us we also have to have an "agent" or "sales tax rep" in each nexus state. My questions are regarding this "agent": Is this true? Can our independent rep be that "agent"? Should the "agent" be a professional tax person in the state? What are the responsibilities of this "agent" if we ourselves will be responsible for licensing and filing? Does it depend on the state? If so, what is the best way to determine each state's requirements with regards to this "agent"?

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Answer:

Diane Yetter photoI'm assuming that the "sales tax rep" someone has told you that you need to have is a "Registered Agent". If you register with the secretary of state to do business in the state, you are required to have a local agent in the state for process serving. If you don't have your own office in the state, there are companies that offer this service. You may have this set up already for a state within your company. This is usually handled by your legal staff so check with them. If you don't have one, you could search for Registered Agent representatives. It is not likely that your independent rep in the state will want to be your Registered Agent and it is not likely you want that either. So, the next question is do you need to register with the secretary of state to obtain a sales tax license. This does vary by state. Historically this was not required, but we are seeing more states impose this requirement. It also depends on your nexus creation activities. In some states, there is a minimum annual fee under the secretary of state registration - in other states it can be significant. This is something you will want to review for the requirements for sales tax registration and also consult your legal staff as this is more of a legal question if the state doesn't require it. You will need to check the laws for each state to see if they require Secretary of State registration to obtain a sales tax license. And also what any exceptions might be to that requirement. We can assist you with this review and evaluation of your activities in the state if you need assistance.

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