[markwelch]

JudiMoore wrote (in part):

[Tim] moved the business to WI and whether or not he continues to commute the 10-15 miles from his home in Rockton to the business in WI, his corporation is still located in WI now.

gcarson replied (in part):

I have always believed that you could relocate your business to another state [without moving your residence] as long as you actually did most of your business in that state (although I have yet to ask an attorney as it hasn't hit me yet). So a real office that you traveled to most days. Not a mail drop or whatever other scheme Mark has [rejected]. I agree, those won't work. A legitimate office that you go to and do most of your business out of.

Mark has always made the claim that this is not possible, you have to also move your residency.

No: while I did use words to this effect (including in the passage I quoted in this thread), I've said repeatedly that if you relocate your business to a non-nexus state, but retain your residence in an "advertising nexus" state, it's extremely likely that neither your advertisers (merchants) nor the nexus state's tax agency will believe you. I didn't intend to say that it was impossible, just that it was extremely risky and unlikely to achieve your goal, if you retain your residence in an advertising-nexus state.

Gcarson's comments, quoted above, about "most of your business" and "most days" are exactly where the problem lies: if you still conduct business in the advertising-nexus state, your relocation has failed to accomplish your goal.

Advertisers (merchants), especially, should be extremely skeptical of publishers who claim to have relocated, because IF the publisher's business is found to still "reside" in the nexus state (remember that a business, including a sole proprietorship, can "reside" in multiple states for tax purposes), then the advertiser will be "caught" in the advertising-nexus law's scope. (And if such a determination is made many months or years later, the advertiser may be required to pay sales tax on many transactions for which no tax was collected.) A single publisher's mistake (or deception) could trigger huge costs for the advertiser.

A 50-person web-publishing business like FatWallet, competently advised by attorneys (and probably following a very clearly-written relocation plan that includes specific written work policies signed by each employee) is not the same as the one- or two-person publishing businesses which most of us operate.

Yes, even if Tim and all 50 of his employees continue to maintain residences in Illinois, that still doesn't definitively create Illinois "nexus" for his business (though Illinois' tax agency might dispute this, arguing that FatWallet remains a "resident" of Illinois because some employees continue to perform some work from their residences or other locations in Illinois).

What I've consistently argued against are "entity games," in which publishers seek clever ways to avoid the impact of "advertising nexus" laws without actually relocating ALL their business activities to other states. I've acknowledged repeatedly that it's (theoretically/legally) possible to avoid "nexus" without moving your personal residence, but that it's just a really risky idea, which tax agencies may challenge (and advertisers should question).

It would be great to hear Tim's report on how FatWallet's advertisers and Illinois' tax agency respond to the relocation. I expect that Amazon, Overstock, and many other large advertisers will insist on specific written proof that the relocation has been "perfected," and even then, some advertisers might choose to end their advertising relationships with FatWallet in order to reduce even the remote risk of triggering Illinois "nexus." At some point, FatWallet might even find it appropriate take legal action to obtain a tax agency or court determination that it no longer triggers nexus (under the advertising-nexus law) with Illinois.

IANAL.

[jtoddv]

I recently spoke with my accountant, not an attorney (will determine the final decision), about the situation. I live in PA, and she said moving the business to WV, with office, phone, computer, internet connection, bank account, etc and commuting will be just fine. I just will no longer be doing business in PA, but rather out of WV.

She also mentioned, if I can remote in to the office via remote desktop, I am essentially doing business in WV, not PA. I do not remember all of the specifics, so forgive me if I am not 100% on this, but she referenced a case where people were remoting into a NY-based server from FL and NY wanted its tax dollars. It was determined that the remoting classified this company as having a presence in the state of NY even though people were located in FL. I am sure some of it is based on this, but at a state level... but trying to understand this is like pulling teeth to me:
Selected Tax Policy Implications of Global Electronic commerce

[gcarson]

Originally Posted by jtoddv

she referenced a case here people were remoting into a NY-based server from FL and NY wanted its tax dollars. It was determined that the remoting classified this company as having a presence in the state of NY even though people were located in FL

Right, but did that case say they did not have a presence in FL as they were remotely connecting to servers in NY? Having a presence in both PA and WV wouldn't help your cause.