Question

root beer incorporated (rbi) is incorporated and headquartered in seattle, washington. rbi runs an internet business, www.makerootbeer, and sells bottling equipment and other supplies for making homemade root beer. it also has an oregon warehouse from which it ships goods. determine whether rbi has income tax nexus in the following situations: a. rbi is incorporated and headquartered in washington and has property and employees in oregon and washington. determine whether rbi has income tax nexus in oregon and washington.

Answer 1

Root Beer Incorporated (RBI) would likely have an income tax nexus in both Washington and Oregon due to having a substantial presence in these states through incorporation, a headquarters, property, and employees.

Step-by-step explanation:

Whether Root Beer Incorporated (RBI) has income tax nexus in Oregon and Washington depends on the presence of RBI's business activities in these states. Nexus is generally defined as a sufficient physical presence or economic connection that allows a state to tax a business.

In the scenario where RBI is incorporated and headquartered in Washington and also has property and employees in Oregon, RBI would likely have income tax nexus in both states.

In Washington, the nexus is established due to RBI being incorporated and headquartered there, which constitutes a substantial physical presence.

As for Oregon, having property and employees there typically establishes a physical presence, thereby creating income tax nexus according to common state tax laws.

It's important to note that states have different standards for what constitutes nexus, and the interpretation can change, so consulting with a tax professional would be advisable for an accurate determination.