Now in its 15th year, Bloomberg BNA’s 2015 Survey of State Tax Departments clarifies each state’s position on the gray areas of corporate income tax and sales and use tax administration, with an emphasis on nexus policies.

New portions of the survey this year address income and sales tax nexus for registration with state agencies, as well as sales tax nexus for drop shipment transactions. The survey also features significant additions to each state’s rules for sourcing sales factor receipts for purposes of the corporate income tax.

Trends highlighted in the survey include:

Nexus: Where states used to only tax the sale of tangible goods, they are now developing tax regimes that tax the sale of digital services and intangible goods such as software downloads, web hosting, and Software-as-a-Service (SaaS) transactions.

State registration: Many states now interpret registering a business with the state as sufficient for establishing nexus, lowering the threshold of activity that renders a corporation subject to tax.

Web servers: States are taking an aggressive stance on the tax consequences of owning or leasing web servers located within their borders. 40 states indicated that owning an in-state internet server establishes a sufficient connection, or a nexus, to create a potential income tax collection requirement in the state. 36 states indicated that this would also result in sales tax nexus in the state.

Sourcing: There is little uniformity across states from sourcing the income on services, intangibles, and cloud computing, resulting in compliance confusion. Despite the shift toward a service-based economy decades ago, states are still unable to reach a consensus on how to source these transactions.

The Survey of State Tax Departments is a reliable source of state tax information for practitioners and has also been cited in congressional testimony.