For Immediate Release
August 2, 2004

New York – Trade Show Nexus Defined

The Department of Taxation and Finance has set threshold limits for Franchise Tax Nexus.  Amendments to the Business Corporation Franchise Tax Regulations have been passed to set forth a bright-line nexus test for foreign corporations participating in trade shows in New York State for 14 days or less during the taxable year.  These amendments apply to taxable years beginning on or after January 1, 2002.

Participation in a trade show or shows in New York by a foreign corporation for 14 days or less during the corporation’s tax year for Federal income tax purposes will be deemed insufficient to subject the corporation to New York state tax, regardless of whether the corporation has employees or other staff present at the trade shows.  These amendments also provide that participation in a trade show or trade shows in New York for 14 days or less by a corporation otherwise exempt from the Business Corporation Franchise Tax pursuant to P.L. 86-272 is an activity entirely ancillary to the solicitation of orders.

Certain stipulations apply, in that the corporation’s trade show activity must be limited to displaying goods or promoting services;  no sales are made at the trade show;  and any orders received are sent outside New York State for acceptance or rejection and are filled outside of the state.

If you would like additional information on this topic or have any questions, please contact James Privett, Regional Vice President - Sales & Use Tax Group at (615) 373-8373 or 615 414-1682. E-mail jprivett@thesaltgroup.com

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