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How does a company with 2 divisions or subsidiaries with separate FEIN's handle nexus?

Full Question: How does a private company with 2 divisions (or subsidiaries) with separate FEIN's handle nexus?

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Answer:

Diane Yetter photoThe determination of nexus is typically handled at the legal entity level. Subsidiaries are separate legal entities that have separate FEIN's so their nexus will be evaluated separately. However, divisions of a company that share a FEIN have nexus for the entire company based on activities of all divisions. One other thing to consider is that even with nexus being determined based on the legal entity basis, there are a number of states that have enacted affiliate/related party nexus rules. Therefore, in these states, if one legal entity has nexus, other related may be deemed to have nexus also. Nexus is very fact sensitive. We would be happy to consult with your business to evaluation your activities to determine where all of your operations have established nexus. If you need further assistance with this matter, please feel free to contact us directly.

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