McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 11

Kashi Corporation is the U..distributor of fencing (sword fighting) equipment imported from Europe.Kashi is incorporated in Virginia and headquartered in Arlington, Virginia.Kashi ships goods to all 50 states.Kashi's employees attend regional and national fencing competitions where they maintain temporary booths to market their goods.Determine whether Kashi has income tax nexus in the following situations:
a) Kashi is incorporated and headquartered in Virginia.It also has property, employees, sales personnel, and intangibles in Virginia.Determine whether Kashi has nexus in Virginia?
b) Kashi has employees that live in Washington, DC and Maryland.All of their employment-related activities are performed in Virginia.Determine whether Kashi has nexus in Washington D..and Maryland?
c) Kashi has two customers in North Dakota.Kashi receives orders over the phone and ships goods to its customers using FedEx.Determine whether Kashi has nexus in North Dakota?
d) Kashi has independent sales representatives in Illinois.The representatives distribute fencing and other sports-related items for many companies.Determine whether Kashi has nexus in Illinois?
e) Kashi has sales personnel that visit South Carolina for a regional fencing competition for a total of 3 days during the year.All orders received are sent to Virginia for credit approval and acceptance.The goods are shipped by FedEx into South Carolina.Determine whether Kashi has nexus in South Carolina?
f) Kashi has sales personnel that visit California for a national fencing competition and several regional competitions for a total of 17 days during the year.All orders received are sent to Virginia for credit approval and acceptance.The goods are shipped by FedEx into California.Determine whether Kashi has nexus in California?
g) Kashi receives orders from its Pennsylvania client over its website.Because the orders are so large, the goods are delivered on Kashi's trucks on a weekly basis.Determine whether Kashi has nexus in Pennsylvania?
h) In addition to shipping goods, Kashi provides fencing lessons in Virginia and Maryland locations.Determine whether Kashi has nexus in Virginia and Maryland?
i) {Planning} Given that Kashi ships to all 50 states, are there locations that Kashi currently does not have nexus in that would decrease Kashi's overall state income tax burden it nexus were created in these locations?