TITLE 63

REVENUE AND TAXATION

CHAPTER 36

SALES TAX

63-3615A.  Substantial nexus. (1) Subject to the limitation in subsection (2) of section 63-3611, Idaho Code, a retailer has substantial nexus with this state if both of the following apply:

(a)  The retailer and an in-state business maintaining one (1) or more locations within this state are related parties; and

(b)  The retailer and the in-state business use an identical or substantially similar name, trade name, trademark or goodwill to develop, promote or maintain sales, or the in-state business provides services to, or that inure to the benefit of, the out-of-state business related to developing, promoting or maintaining the in-state market.

(2)  Two (2) entities are related parties under this section if they meet any one (1) of the following tests:

(a)  Both entities are component members of the same controlled group of corporations under section 1563 of the Internal Revenue Code;

(b)  One (1) entity is a related taxpayer to the other entity under the provisions of section 267 of the Internal Revenue Code;

(c)  One (1) entity is a corporation and the other entity and any party, for which section 318 of the Internal Revenue Code requires an attribution of ownership of stock from that party to the entity, own directly, indirectly, beneficially, or constructively at least fifty percent (50%) of the value of the outstanding stock of the corporation; or

(d)  One (1) or both entities is a limited liability company, partnership, estate or trust, none of which is treated as a corporation for federal income tax purposes, and such limited liability company, partnership, estate or trust and its members, partners or beneficiaries own in the aggregate directly, indirectly, beneficially, or constructively at least fifty percent (50%) of the profits, capital, stock or value of the other entity or both entities.

(3)  The provisions of this section shall not apply to a retailer that had sales in this state in the previous year in an amount of less than one hundred thousand dollars ($100,000).

(4)  The definition of "Internal Revenue Code" in section 63-3004, Idaho Code, shall apply to this section.

History:

[63-3615A, added 2008, ch. 49, sec. 2, p. 121.]