Both Houses of the Texas legislature have passed a bill that legislatively repeals a controversial regulation that has caused a great deal of concern to e-commerce vendors and to Web hosting companies. A state can only require a company to collect its sales tax if the company has a substantial physical presence, or “nexus,” in the state, because of a 1992 U.S. Supreme Court case, Quill v. North Dakota. Until last July, the mere use of a server in a state — without any other presence there — had not been considered adequate to establish nexus.
As an update to this story, Governor Perry signed this Texas server bill into law on June 17, 2011.
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Texas Clears Up Server-Nexus E-Commerce Sales Tax Issue
Posted by: Marvin Kirsner June 11, 2011 05:00 AMBoth Houses of the Texas legislature have passed a bill that legislatively repeals a controversial regulation that has caused a great deal of concern to e-commerce vendors and to Web hosting companies. A state can only require a company to collect its sales tax if the company has a substantial physical presence, or “nexus,” in the state, because of a 1992 U.S. Supreme Court case, Quill v. North Dakota. Until last July, the mere use of a server in a state — without any other presence there — had not been considered adequate to establish nexus.
Marvin Kirsner