Nexus Remains Important Part of Multistate Payroll Considerations

Nexus, the required level of connection between a business and a state or locality before taxes may be imposed, is an important but complex consideration for payroll taxes and wage and hour laws, a payroll educator and a payroll association official said June 3.

Generally, nexus is established by having a business presence in a state, such as an office, store, factory, or even by an employee entering into a state, Jim Medlock, CPP, a payroll compliance educator with Medlock and Associates, said at the American Payroll Association’s virtual Congress.

For state income tax withholding, nexus determines whether an employer ...