State & Local Tax

State and Local Tax Services for Multi-State Businesses

Evolving state and local tax (SALT) laws are making operating as a multi-state business more challenging. States are limiting deductions, setting marketplace facilitator rules, and changing nexus rules when it comes to remote workers, among other regulations. These sweeping changes make it essential to work with experienced SALT experts to ensure you’re compliant. As a top 10 Illinois firm, Mowery & Schoenfeld’s specialized SALT team is ready to help clients tackle their SALT complexities and more thanks to our integrated services.

Many multi-state businesses benefit from SALT advisors’ expertise. Whether you’re a multi-state operator, e-commerce seller, professional services firm expanding across state lines, or a real estate operator with a multi-state portfolio, we can help. With 200-plus team members across our firm, we can provide personalized support with the resources and expertise you need.

Expanding your business into new states can become complicated, but we’re here to make it easier. Our team understands the ins and outs of state and local tax planning, and we’ll walk you through strategies, like using pass-through entity (PTE) tax elections, to help you work around SALT deduction limits. We’ll work closely with you to find the best approach for your business’s growth, so you can move forward confidently.

Michael Szewc >

Director of State & Local Tax Services

Josh Kiser >

Tax Manager

Insights

U.S. Online Sales Tax: Are Foreign Companies Exempt? >

OBBBA’s State and Local Tax (SALT) Changes, Explained >

Navigating Sales & Use Tax: Mitigating Risks and Maximizing Compliance >

Comprehensive State and Local Tax Service Capabilities

Our SALT team takes a holistic look at your business to offer the best support for your unique situation. A key part of our approach is to regularly review filing and registration requirements across jurisdictions so you can manage risk and limit exposure.

Our expertise includes:

State income and franchise tax: Staying on top of changing rules, finding the right strategies, and ensuring tax compliance and planning.
Sales and use tax: Monitoring economic nexus, handling voluntary disclosure agreements (VDAs), cleaning up sales tax registration, and ensuring compliance with marketplace facilitator rules.
Property tax: Helping with both real and personal property tax and providing documentation support.
Credits and incentives: Finding, evaluating, and landing state and local tax credits and incentives and maintaining compliance and reporting.
Audit defense and tax controversy: Offering state and local audit representation, completing audits to find refund opportunities, and helping with dispute resolution and negotiated settlements with taxing authorities.

State Tax Nexus: Where Your Business Has Tax Obligations

Whether you’re looking for better warehouse locations, a stronger talent pool, or new markets, expanding into more states is a natural step in your business’s growth. However, the major differences in state and local tax laws can make the process difficult.

Compliance depends on a key concept: nexus. In state and local taxation, nexus means the connection between a taxing authority and a business. This relationship is what decides if your business needs to follow tax rules in a specific state.

Common Activities That Trigger Nexus

Many different business activities can establish nexus. Common examples include:

Owning or leasing property or capital assets
Employing workers, which sometimes includes remote employees
Storing supplies or renting warehouse space
Transacting business in the state

Nexus Rules

Nexus rules vary from state to state, but some general guidelines apply. For income tax, a business is typically considered to have nexus if it earns income from, owns property in, or employs residents of a state. Sales tax nexus rules are broader. They include soliciting business and intangible property within a state. Certain online activities also can trigger nexus.

Our team is skilled at helping businesses evaluate where they may have triggered nexus — or may in the future — determine filing obligations, and prioritize next steps before issues turn into assessments or penalties.

Online Nexus and E-Commerce

Online nexus happens when a company operates digitally in a state. This could mean running a website, making online sales, or engaging in e-commerce, even without a physical presence. Online nexus is commonly established in three ways:

Click-through nexus: When an in-state business or resident receives a commission for referring sales to an out-of-state seller, often through a website link.
Affiliate nexus: When a business creates nexus through a related entity or affiliate operating in the state, including certain marketplace relationships.
Economic nexus: When sales in a state exceed that state’s threshold.

More and more states see online sales as a trigger for sales tax nexus, especially in the wake of the 2018 Supreme Court decision in South Dakota v. Wayfair, Inc. This ruling lets states set economic nexus thresholds based on sales volume or transaction count, so businesses may have sales tax obligations in a state just from online sales.

As laws continue to evolve, it’s important to keep an eye on both physical and online nexus requirements, especially because many states now apply standards established in the Wayfair case to digital businesses.

Our SALT team stays on top of ever-changing laws and regulations to help e-commerce and multi-state businesses assess their online sales activity, interpret state thresholds, and build a compliance strategy.

Remote-Worker Nexus

Remote-worker nexus has gained more attention as remote work has increased after the pandemic. When employees work from states other than the company’s home state, businesses could face new payroll withholding requirements and must comply with each state’s income tax rules. Also, companies need to allocate income based on their remote workforce’s locations and activities.

In the past, businesses could rely on federal law (PL 86-272) to avoid state income taxes if all they did was solicit sales, but those protections are shrinking. These days, many remote-worker situations no longer qualify, so companies need to pay closer attention to what actually counts as protected activity.

Certain states also have “convenience-of-the-employer” rules, which can create tax obligations for businesses even if employees work remotely for personal convenience. Managing remote-worker nexus is necessary to avoid unexpected tax liabilities.

If your company needs help evaluating your remote-work situation, our SALT team can coordinate payroll and income tax compliance and see whether you are meeting your filing requirements and help you plan for future personnel changes.

Economic Nexus and Sales Tax Compliance Post-Wayfair

The Wayfair case changed tax compliance dramatically and established the concept of economic nexus for remote sellers. As of 2026, the 45 states that have a statewide sales tax and the District of Columbia also have economic nexus laws.

Typical Economic Nexus Thresholds

Most states set their economic nexus thresholds at $100,000 in gross sales or 200 separate transactions within the state during a calendar year, following in South Dakota’s footsteps. Recently, though, laws have done away with the transaction count threshold in Colorado, Iowa, Maine, North Dakota, Washington, and Wisconsin, among others. Businesses should regularly review each state’s requirements with their tax advisor because thresholds may continue to change.

Marketplace Facilitator Laws

The rise of marketplace facilitator laws has impacted sales tax compliance for online sellers. All 45 states with a statewide sales tax and D.C. require marketplace platforms like Amazon, eBay, Etsy, and Shopify to collect and remit sales tax on behalf of third-party sellers. While platforms handle sales tax for transactions processed through their marketplaces, sellers are still responsible for compliance and tax collection on direct sales channels (such as their own websites or retail stores). Understanding these rules and platform-specific requirements is essential to stay compliant.

If your business operates outside its home state, consult with one of our advisors for a nexus analysis. This assessment is the first step toward compliance and avoiding audits by state tax authorities.

Get Started with State & Local Tax Services from Mowery & Schoenfeld

Talk to a SALT advisor today.