does a home office establish tax nexus in Illinois

[NETRANGERCDA]

I would not be entering or receiving orders in my home office sales function. I would simply be conducting business development activities. I would have no access to the inventory or order entry systems.

 

[justalayman]

Yes it does. If the employee is working in a state at the employer's request, that establishes nexus. Once the business has nexus, it is subject to the laws of that state.

I also realized you were responding to the section where I was speaking to personal income taxes. That is much simpler in this situation. Due to the reciprocity agreements in place, as long as the employer does not establish a business presence (such that they would have to register as a business and obtain any required licenses or registrations) whether the illinois resident performs his work in Wisconsin or Illinois is irrelevant. It remains a Wisconsin employer and an illinois homed employee. That means the employer cannot withhold Wisconsin taxes and they can but are not required to withhold illinois personal income taxes.

The employee working from home, regardless what he does and whether it be at the request or simply with the permission of the employer does not change that. The employer remains to be recognized as a Wisconsin employer and acts as such. The employee continues to be an illinois resident and is dealt with as such.

 

[cbg]

OP, is it in your mind somewhere that if you can disprove the employer's alleged reason for reneging on the offer, you can force him to reinstate it?

Because if so, you may as well sit back down and relax. It is not illegal to withdraw a job offer. It is not illegal to withdraw a job offer even if you can prove conclusively that the reason for the withdrawal is nonsense (and I am still not convinced that you can). I've already told you, in this thread, the only basis on which you can take any kind of legal action against the employer. If you believe you can show conclusively that the offer was withdrawn for a reason expressly prohibited by law (race, religion, national origin, disability, etc.), then you need to file a complaint with the EEOC, but even that will not force the employer to reinstate the offer. Anywhere between six months to two years from the date you file, you'll receive a right to sue letter from the EEOC along with the opinion of the EEOC. The opinion will state that there is illegal discrimination, that there is not illegal discrimination, or that there is not enough evidence to determine if there is illegal discrimination, but you'll get a right to sue letter regardless. You then will have 90 days to convince an attorney to take the case, or to file the case yourself. At a to-be-determined-by-the-court-in-question time after that, you'll either win or lose in court. If you lose, you get nothing. If you win, you'll get a judgement that will almost certainly be a certain amount of pay and not the job itself, and it will be up to you to try to collect it. But you still won't have the job.

 

[NETRANGERCDA]

I'm not interested in taking legal action and I realize I can't force them to reinstate the offer. At this point I'm just curious about the tax nexus issue. That is why I posted in the tax forum.

 

[FlyingRon]

I would not be entering or receiving orders in my home office sales function. I would simply be conducting business development activities. I would have no access to the inventory or order entry systems.

Did I say SQUAT about orders? Are you acting as a representative or agent? I.e., do you talk to people outside your company?

 

[davew128]

I also realized you were responding to the section where I was speaking to personal income taxes. That is much simpler in this situation. Due to the reciprocity agreements in place, as long as the employer does not establish a business presence (such that they would have to register as a business and obtain any required licenses or registrations) whether the illinois resident performs his work in Wisconsin or Illinois is irrelevant. It remains a Wisconsin employer and an illinois homed employee. That means the employer cannot withhold Wisconsin taxes and they can but are not required to withhold illinois personal income taxes.

The employee working from home, regardless what he does and whether it be at the request or simply with the permission of the employer does not change that. The employer remains to be recognized as a Wisconsin employer and acts as such. The employee continues to be an illinois resident and is dealt with as such.

Speaking solely to the matter of payroll, you're correct.

Regarding the matter of the business establishing nexus in IL, unless OP was soliciting sales and literally nothing else including approving and fulfilling the orders, working from home for the employer's convenience establishes income tax nexus for the business. I've defended this very position in a corporate tax audit where the home state WANTED the home office to be for "just a salesperson" so that they could take 100% apportionment on the sales from the other state.

 

[justalayman]

davew128;3220231]Speaking solely to the matter of payroll, you're correct.

thanks for noticing

Regarding the matter of the business establishing nexus in IL, unless OP was soliciting sales and literally nothing else including approving and fulfilling the orders, working from home for the employer's convenience establishes income tax nexus for the business.

Not sure I agree with the approving orders (although your definition may not match mine) as that is part of soliciting orders. To fulfilling orders: I did speak to means of delivery affecting the issue.




but as your post has suggested, the issue is very fact dependent and, as often happens, we don't have any.

 

[davew128]

Not sure I agree with the approving orders (although your definition may not match mine) as that is part of soliciting orders. To fulfilling orders: I did speak to means of delivery affecting the issue..

You're going to have to trust me. The underlying law is PL 86-272. The courts have been VERY strict about the definition of soliciting sales. Approving orders is NOT considered to be soliciting sales. To give you perspective on just HOW strict, I refer you to Wisconsin vs William Wrigley Co. Yes THAT Wrigley company.

 

[justalayman]

thanks for the law cite. Very interesting, and yes, educational.




can you define approving and/or fulfilling orders as you are referring to it? As I said, my definition is likely different than yours and may account for the differing opinion. In Pl 86-272 it specifically state that approving or accepting orders is not protected. Just what is a salesman doing if not accepting an order? Just not understanding what they are referring to with the approving of an order though.

I would see the accepting deposits in the same way. How is that not part of the, if not direct, then surely the ancillary, duties of a salesman?

 

[davew128]

States naturally try to limit it as much as possible. Here's CA's FAQ on the matter" https://www.ftb.ca.gov/forms/misc/1050.pdf While that is from CA, each state has effectively adopted that interpretation almost identically. There are de minimis non sales activities and activities ancillary to sales solicitations which do not create nexus, as it would otherwise be virtually impossible to meet the standard by an absolute literal reading of the law.

To answer your direct question, forwarding orders to a home office to be processed or reviewed would be a protected activity. Accepting and acting on them would not be.

 

[justalayman]

.

To answer your direct question, forwarding orders to a home office to be processed or reviewed would be a protected activity. Accepting and acting on them would not be.

Now it's just starting to sound stupid.




Hi, my name is jal, i'm here to take your order.


(3 hours later)


thank you for your order.


customer: here is my deposit payment as your company requires


jal: sorry but I cannot accept that as it would put me in your nexus

custome; but you said I had to pay a 50% deposit upon placing an order

jal: you do

customer; well, here is it

jal; sorry but I cannot accept ot

customer; why not? do you think I'm giving you a bad check or something?

jal; no, it's just that if I accept it, it will put me in your states nexus and my company doesn't want that to happen

customer; so, you want me to buy something from you but you (personally) cannot accept my money, even though you said I had to pay a 50% deposit when making an order

jal; now you're getting it

customer; so, how can I place an order if you cannot accept my required deposit

jal; i have absolutely no clue. All I know is what my boss told me.

customer; well, I don't give a damn about your nexus or my nexus or that you drive a Lexus or anything else. All I know is that if your company is this screwed up, I'm buying from your competitor. Their salesman drives a Cadillac so I know he ain't gonna give me all this crap about no damn nexus.

 

[davew128]

In the real world, sales solicitations don't involve accepting money in these instances. It really doesn't. Salespersons refer all inquiries to the "home office".

 

[justalayman]

In the real world, sales solicitations don't involve accepting money in these instances. It really doesn't. Salespersons refer all inquiries to the "home office".

well, that all would depend on what was being sold. Had an uncle that dealt with deals worth millions and millions of dollars selling merchandise to the likes of Walmart, Kmart, and many other big retailers as well as smaller customers as well. I can see him not taking deposits for such sales. Just the same there are the guys that sell home improvement work that may travel into a neighboring state, or Florida after a hurricane, and many other smaller sorts of salesmen that it would be in due course of their activities to take a deposit for the merchandise or services they were representing.


Heck, what about the door to door salesmen selling Kirby vacuums, Rainbow vacuums, encyclopedia's, and Fuller brushes?

 

[davew128]

well, that all would depend on what was being sold. Had an uncle that dealt with deals worth millions and millions of dollars selling merchandise to the likes of Walmart, Kmart, and many other big retailers as well as smaller customers as well. I can see him not taking deposits for such sales. Just the same there are the guys that sell home improvement work that may travel into a neighboring state, or Florida after a hurricane, and many other smaller sorts of salesmen that it would be in due course of their activities to take a deposit for the merchandise or services they were representing.

Services aren't covered.

Heck, what about the door to door salesmen selling Kirby vacuums, Rainbow vacuums, encyclopedia's, and Fuller brushes?

If they're taking orders and payments, they arent covered. You're overthinking this looking for exceptions to the law.

Also keep in mind that this law does NOT cover sales tax. The presence of sales people creates nexus for collecting sales tax.

 

[justalayman]

davew128;3220313]Services aren't covered.

in the law you cited, they did speak to a salesman who also did things like repairing a machine and that caused them to fall into the nexus issue.

If they're taking orders and payments, they arent covered. You're overthinking this looking for exceptions to the law.

just trying to understand it.

A

lso keep in mind that this law does NOT cover sales tax. The presence of sales people creates nexus for collecting sales tax.

figured such but thanks for the note.



thanks for the schooling. Once in awhile if I shut up there are some people here that do have knowledge and are willing to share. Just kick me once in awhile when I overstep.