United States

Vermont: Draft Technical Bulletin Clarifies Physical Presence Not Required to Create Corporate Income Tax Nexus

Nov 20, 2017
From KPMG TaxWatch

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The Vermont Department of Taxes has released a draft Technical Bulletin summarizing when taxpayers are considered to have established Vermont corporate income tax nexus. Vermont doesn't have statutory economic nexus, but per the bulletin, for income tax purposes, substantial nexus does not require physical presence and is established when a foreign corporation intentionally or regularly exploits Vermont’s market. Examples of activities that are deemed to create nexus include, but are not limited to, sending representatives to exhibit at a trade show or festival, having employees who telecommute from their homes in Vermont, making loans to Vermont residents, using intangibles in Vermont, and licensing software to Vermont customers. The bulletin also outlines the state’s approach to P.L. 86-272 and provides information on when “No Vermont Activity” returns must be filed. The Department is requesting comments on the draft bulletin through December 8, 2017. Please stay tuned to TWIST for more nexus updates. 

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.