Did you know that auditors will attend trade shows specifically to get the names of participants to verify that they’re registered to collect sales tax in the jurisdiction? Any time there’s a trade show, auditors will request a list of participants as well as attend to gather the names of attendees. At the end when your team is headed back to your headquarters, the auditor is back at the office checking through names to make sure the companies are registered to collect sales tax. If not, you can expect an audit headed your way. There are different ways to create nexus and attending a trade show is one of them. However, it’s not straightforward since many states have different regulations on what constitutes nexus during a trade show. So let’s break it down by types of attendance and examples of what that means.
As a seller, if you’re at a trade show and are taking orders it can depend on how much you sell, how many days you spend at trade shows in that state, or if you’ve taken orders in the past. For instance in Nevada, the first time probably doesn’t create nexus if you’re taking orders at a Las Vegas trade show. Attend a second year and you’ll have to start collecting. California stipulates that you have up to 15 days at trade shows and can’t make more than $100,000 in net income during your time in California to remain nexus free. As a spectator. Those who are just attending and looking at the exhibits can create nexus in some states and not in others. Connecticut, for instance, allows you to attend trade shows for up to 15 days before creating nexus.
As long as you’re just there to look and not to conduct sales, some states consider you not there to create a business presence. Others, however, consider mere attendance enough to constitute nexus. As an exhibitor, if you’re there with displays and presentations but aren’t accepting sales through your booth, you might be creating nexus but you might not. Connecticut, again, does allow for exhibitors to display for up to 15 days before nexus is created. All sales must be accepted outside of the state so if you have order forms at your booth, you’ll be creating nexus there. However, if you only have an email newsletter signup list, that might not constitute nexus because you’re not making sales. Nexus gets complicated when it comes to trade shows so be sure to check on the laws of states where you’re attending a trade show to be sure you won’t make a big mistake.
