Tax

Tax obligations are created by facts — where you sell, where people work, what you sell — not by decisions anyone consciously makes. The characteristic failure is discovering an obligation years after it began, with penalties and interest attached.

This structures the question and tells you what to ask. Tax is technical, jurisdiction-specific, and changes frequently. Positions on anything material belong with a qualified tax adviser or CPA, not a checklist.

Nexus: the thing that creates obligations quietly

Nexus is the connection that gives a jurisdiction the right to tax you. It is established by activities most companies do not think of as tax events:

• An employee working somewhere. One remote hire in a new state commonly creates payroll registration, income tax withholding, and often corporate income tax nexus.
• Economic activity without physical presence. Since Wayfair, US states set sales-tax nexus on revenue or transaction thresholds — a few hundred thousand dollars, or a couple of hundred transactions, with the numbers differing by state.
• Inventory held somewhere, including in a third-party fulfillment warehouse you never visit.
• Contractors, or attending trade shows, in some jurisdictions.

Review nexus whenever you hire in a new location, cross a revenue threshold, or change how you distribute. Registering late costs more than registering early, and voluntary disclosure programs exist precisely because this is so common.

Sales tax is about what you sell, not what you charge

Taxability of software and services varies enormously by state: SaaS is taxable in some, exempt in others, and treated differently again if delivered with implementation services. The classification of your own product is a determination worth getting in writing and revisiting when packaging changes — see revenue:pricing-and-packaging, because bundling can change the answer.

Exemption certificates for tax-exempt customers must be collected and kept current. In an audit, missing certificates mean you owe the tax you did not collect.

The calendar is most of the discipline

Tax failures are usually administrative, not technical: a missed registration, a late filing, an estimated payment nobody scheduled. Maintain a calendar of every obligation by jurisdiction with an owner, and treat it as part of finance:financial-reporting-and-close.

Where it meets the rest of finance

• finance:financial-reporting-and-close — tax provision and the deferred position
• finance:capital-allocation — after-tax returns are the only ones that matter for a decision
• people:workforce-planning — every hire in a new jurisdiction is a tax question before it is a cost question
• finance:revenue-recognition — book and tax treatment diverge, and the difference is itself something to track

Never

• Assume no obligation because there is no office in a jurisdiction.
• Treat your product's taxability as settled across states without a determination.
• Sell into exempt customers without current exemption certificates.
• Take a position on a material matter without a qualified adviser.