Double Taxation of Corporate Income

Discussion Questions
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How does nexus affect the taxability of such wide-spread transactions?
Nexus relates to connection, whereby a taxpayer needs to pay and remit tax to a state depending on business activities and source of income in a state (CCH Incorporated, 2008). Nexus affects taxability of transactions depending on the extent to which corporations and taxpayers derive income from different states. There is a need for taxpayers to disclose details when dealing with nexus of wide-spread transactions. In most cases, the physical presence of sellers’ and businesses results to nexus (CCH Incorporated, 2008). Besides physical presence, economic connection is increasingly now affecting taxability of wide-spread transactions. Nexus does affect businesses ability to get tax credits depending on source of income; taxpayers are more likely to get tax credits for transactions in states where they derive their income. Nonetheless, there is a likelihood of multiple taxation affecting businesses, if a single transaction occurs under interstate commerce.  What is meant by the term double taxation of co...