Studies by Sabrix, which provides transaction tax management, have determined that 95 percent of the companies it surveyed underestimated their nexus footprint and that 85 percent of those surveyed underestimated the number of states in which they needed to register by more than 50 percent when it comes to sales-and-use taxes

The study by San Ramon, Calif.-based Sabrix also discovered that 85 percent of participating companies underestimated the number of states they needed to register in by more than 50 percent. Mid-sized companies with customers widely dispersed in the United States were the most likely to miss the mark. Small companies also underestimated, but most have lower non-compliance risk because they do business in fewer states.

* Independent contractors. An agent acting on behalf of a company establishes nexus in most status.
* Services. Performing services in a state, even if only once in a year can create nexus.
* Trade shows. If a company spending a single day at a show that can create nexus even if the company does not sell anything.

The company also cited the increased effort by states to tighten audits because of the need for more revenue. For example, California conducted door-to-door visits to more than over 74,000 businesses in more than 130 Zip codes as part of the “Statewide Compliance and Outreach Program”. Sabrix said many other states are preparing such programs. Sabrix also expects states to follow New York's lead in claiming sales tax nexus for affiliates of Amazon.com