{"id":15675,"date":"2026-04-01T19:08:20","date_gmt":"2026-04-01T19:08:20","guid":{"rendered":"https:\/\/taxops.com\/?p=15675"},"modified":"2026-04-02T19:39:58","modified_gmt":"2026-04-02T19:39:58","slug":"state-nexus-demystified-navigating-tax-compliance-after-wayfair-episode-1-2","status":"publish","type":"post","link":"https:\/\/taxops.com\/state-nexus-demystified-navigating-tax-compliance-after-wayfair-episode-1-2\/","title":{"rendered":"Your Tax Footprint Is Probably Bigger Than You Think: What Finance Leaders Need to Know About State Nexus"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/taxops.com\/wp-content\/uploads\/2026\/03\/State-Nexus-Demystified-Podcast-1024x576.png\" alt=\"\" class=\"wp-image-15642 lazyload\" data-srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2026\/03\/State-Nexus-Demystified-Podcast-980x551.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2026\/03\/State-Nexus-Demystified-Podcast-480x270.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><noscript><img decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/taxops.com\/wp-content\/uploads\/2026\/03\/State-Nexus-Demystified-Podcast-1024x576.png\" alt=\"\" class=\"wp-image-15642 lazyload\" srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2026\/03\/State-Nexus-Demystified-Podcast-980x551.png 980w, https:\/\/taxops.com\/wp-content\/uploads\/2026\/03\/State-Nexus-Demystified-Podcast-480x270.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1024px, 100vw\" \/><\/noscript><\/figure>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><em><a href=\"https:\/\/tax-intelligence.captivate.fm\/listen\" target=\"_blank\" rel=\"noopener\" title=\"\">A conversation with Marc Gordon, Head of State and Local Tax, and Lindsay Haskell, Partner at TaxOps<\/a><\/em><\/p>\n<\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>There&#8217;s a question that keeps CFOs up at night more than a surprise audit: &#8220;Do we have nexus somewhere we don&#8217;t know about?<\/strong>&#8220;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you&#8217;re not sure of the answer, you&#8217;re not alone. In the inaugural podcast episode of \u201cTax Intelligence with TaxOps\u201d <a href=\"https:\/\/taxops.com\/marc-gordon\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Marc Gordon<\/a> and <a href=\"https:\/\/taxops.com\/lindsay-haskell\" target=\"_blank\" rel=\"noopener\" title=\"\">Lindsay Haskell<\/a> walk through everything finance leaders need to understand about state nexus \u2014 from the basics of what creates it, to managing prior-year exposure, to when a Voluntary Disclosure Agreement is the right strategic move.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s a summary of the conversation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><br><strong>What Is Nexus, Exactly?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Nexus is a business&#8217;s connection to a state \u2014 and it&#8217;s the threshold a state must clear before it can legally assert tax on your business. There are two kinds.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1. \u201cPhysical Nexus\u201d is the more intuitive category. If you have property, payroll, or employees performing activities in a state, you almost certainly have physical nexus \u2014 and that triggers both income tax and sales tax obligations. The dollar amounts don&#8217;t matter much here; presence is presence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One important nuance: a federal law called Public Law 86-272 can protect sellers of tangible personal property from income tax nexus even when they have some physical activity in a state. But this protection has been steadily eroding. Recent guidance has found that certain website cookies can eliminate PL 86-272 protection entirely, so sellers relying on this shield need to understand how their website activity might be undercutting it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2. &#8220;Economic Nexus&#8221; emerged as a response to the rise of e-commerce. As online retailers grew without physical stores, state sales tax revenues declined sharply. States pushed back, and the issue landed at the Supreme Court.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The landmark South Dakota v. Wayfair decision in 2018 changed everything. It established that a business can have nexus in a state based purely on economic activity \u2014 no physical presence required. The bright-line test: $100,000 in sales <strong><em>or<\/em><\/strong> 200 separate transactions in a state. Today, every state that has a sales tax has an economic nexus threshold based on this standard.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(Quick memory trick for the five states with no sales tax: &#8220;Oh DAMN, No Sales Tax&#8221; \u2014 Oregon, Delaware, Alaska, Montana, New Hampshire.)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the income tax side, economic nexus is more complex. The Wayfair ruling doesn&#8217;t directly translate to income taxes. Many states rely on a vague &#8220;doing business&#8221; standard \u2014 essentially, are you building and maintaining a market of customers in their state? About 15 states have adopted clearer bright-line tests based on apportionment factors (property, payroll, and sales), which makes analysis much cleaner in those jurisdictions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Remote Work Factor<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Post-COVID, many companies have a significantly larger tax footprint than they realize. A single remote employee in a new state creates physical nexus \u2014 and that exposure doesn&#8217;t disappear because management wasn&#8217;t aware of it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A real-world example: one client had an employee relocate to California without telling management. The employee updated their profile in ADP, so California payroll withholding was being paid on $3,000 of wages. California identified the business, and despite having no sales in the state whatsoever, the company still faced an $800 minimum tax filing obligation. For $800, the state came calling.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The lesson: states share data. The Department of Revenue, the Secretary of State, and the employment security department may all be talking to each other. &#8220;How will they know?&#8221; is not a reliable compliance strategy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>We Think We Have Prior-Year Exposure. Now What?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is one of the most common questions the TaxOps team hears. The answer starts with data gathering: where are your property, payroll, and sales? How have those changed over time? What&#8217;s the apportionment picture for income tax purposes?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From there, the process resembles building a state tax exposure model \u2014 running state income tax calculations for the states where nexus may exist, layering in sales tax exposure, and developing a clear picture of the liability across all relevant periods.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One critical point: if you&#8217;ve had nexus in a state but haven&#8217;t filed, the statute of limitations has never started running. That means exposure can theoretically go back 10 or more years. This is why the look-back analysis matters so much \u2014 and why understanding your options before taking any action is essential.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As a practical starting point, TaxOps generally recommends modeling a three-year look-back, while keeping in mind that longer periods may be relevant depending on the facts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What Is a Voluntary Disclosure Agreement (VDA), and Should You Use One?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A Voluntary Disclosure Agreement is a formal program offered by most states that lets a business proactively come forward, acknowledge prior noncompliance, and resolve the issue under structured terms. The key benefits:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Penalty abatement. Penalties typically run 25\u201350% of the underlying tax liability. On a large sales tax exposure, that&#8217;s significant. The larger the liability, the more valuable this benefit becomes.<\/li>\n\n\n\n<li>Limited look-back period. Instead of facing 10 years of exposure, a VDA typically limits the look-back to three or four years \u2014 sometimes fewer. That can dramatically reduce the total exposure.<\/li>\n\n\n\n<li>Anonymity (in many cases). Most VDA programs allow a business to approach a state anonymously through a representative, getting preliminary buy-in on the terms before formally disclosing who they are.<\/li>\n\n\n\n<li>A clean slate going forward. Completing a VDA gets all the administrative setup done \u2014 account IDs, registration \u2014 so you can hit the ground running on prospective compliance.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The most important caveat: a VDA must be initiated before the state contacts you. If you&#8217;ve already received a nexus questionnaire, a notice, or have proactively registered in the state, you typically can no longer participate. This also means that if you&#8217;re planning to start filing prospectively, be prepared for the possibility that a state may ask when you started doing business there \u2014 and understand what that answer means for your options.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>VDA or Just File Prospectively? How to Think About the Decision<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The right answer depends on the specific circumstances \u2014 and it doesn&#8217;t have to be the same answer for every state.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Factors pointing toward a VDA:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Large or uncertain prior-year exposure<\/li>\n\n\n\n<li>An M&amp;A transaction is pending or anticipated (buyers want clean books)<\/li>\n\n\n\n<li>The business is growing and expanding its state footprint<\/li>\n\n\n\n<li>You want certainty and a formal resolution<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Factors pointing toward prospective-only filing:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Exposure is small and the cost\/benefit doesn&#8217;t support a formal VDA process<\/li>\n\n\n\n<li>The business is winding down and risk tolerance is higher<\/li>\n\n\n\n<li>The look-back period is manageable without a formal agreement<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The key is to make the decision intentionally, with a clear picture of the exposure. Doing nothing \u2014 or hoping states won&#8217;t notice \u2014 is a strategy that typically ends badly, especially as companies scale, get acquired, or face increased audit activity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Key Takeaways<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1. Your nexus footprint is probably larger than you think. Physical presence and economic nexus have both expanded significantly in recent years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2. Remote employees create immediate nexus \u2014 regardless of whether management is aware of it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">3. The statute of limitations doesn&#8217;t run until you file. Prior-year exposure can go back a decade or more.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">4. VDAs offer meaningful benefits \u2014 penalty abatement, limited look-back, and often anonymity \u2014 but must be initiated before a state contacts you.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">5. There&#8217;s no one-size-fits-all answer. The right strategy depends on your exposure profile, your growth plans, and your risk appetite.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If today&#8217;s post prompted a closer look at your state tax footprint, start by mapping your property, payroll, and sales by state. Then reach out to your tax advisor \u2014 or contact the TaxOps team directly at taxops.com\/contact \u2014 to model the exposure and determine the best path forward.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Listen to the full conversation on Tax Intelligence, available now.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tax Intelligence with TaxOps<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is the podcast where experienced tax professionals share clear, practical insight on today&#8217;s most complex tax issues\u2013from SALT and federal tax strategy to ASC 740, tax minimization, and investment fun considerations. Each month, our experts break down what matters, what&#8217;s changing, and how to think strategically about tax\u2013so you can make informed decisions with confidence. <a href=\"https:\/\/tax-intelligence.captivate.fm\/listen\" target=\"_blank\" rel=\"noopener\" title=\"\">Listen today<\/a>!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>About TaxOps<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At TaxOps, business tax is all we do. Our teams have the knowledge and focus to solve tax problems with practical tax answers. By hiring our Big Four-veteran leaders and experienced teams, you get tax strategists on your side supporting your strategy wherever business takes you. We deliver the strength, experience, and resources of a national tax brand with the hands-on client engagement of a boutique firm in federal, corporate, state and local and international tax as well as tax minimization strategies for businesses. For an introductory call, visit <a href=\"https:\/\/taxops.com\/contact\/\" target=\"_blank\" rel=\"noopener\" title=\"\">TaxOps.com\/contact<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>&nbsp;<\/em><\/p>\n\n\n\n<div style=\"height:57px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-fe48e5de wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/taxops.com\/contact\/\">Talk to a Business Tax Advocate<\/a><\/div>\n<\/div>\n\n\n\n<div style=\"height:53px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Read more<\/h2>\n\n\n<ul class=\"wp-block-latest-posts__list wp-block-latest-posts\"><li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/auditor-independence-in-the-age-of-private-equity\/\">Auditor Independence in the Age of Private Equity: What CFOs Need to Know<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/r-d-credits-for-software-companies\/\">R&amp;D Credits for Software Companies: Scrum Teams, Qualifiers, and Section 174 After OBBBA<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/section-174-decoupling-what-tax-pros-need-to-know-state-by-state\/\">Section 174 Decoupling: What Tax Pros Need To Know State By State<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/sean-espy-new-partner\/\">TaxOps Welcomes Sean Espy as Partner, Tax Minimization<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/state-nexus-demystified-navigating-tax-compliance-after-wayfair-episode-1-2\/\">Your Tax Footprint Is Probably Bigger Than You Think: What Finance Leaders Need to Know About State Nexus<\/a><\/li>\n<\/ul>","protected":false},"excerpt":{"rendered":"<p>A conversation with Marc Gordon, Head of State and Local Tax, and Lindsay Haskell, Partner at TaxOps There&#8217;s a question that keeps CFOs up at night more than a surprise audit: &#8220;Do we have nexus somewhere we don&#8217;t know about?&#8220; If you&#8217;re not sure of the answer, you&#8217;re not alone. In the inaugural podcast episode [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":15642,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"<!-- wp:spacer {\"height\":\"41px\"} -->\n<div style=\"height:41px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:image {\"id\":14221,\"sizeSlug\":\"large\",\"linkDestination\":\"none\"} -->\n<figure class=\"wp-block-image size-large\"><img src=\"https:\/\/taxops.com\/wp-content\/uploads\/2025\/01\/2025-Colorado-State-and-Local-Tax-Legislation-1024x576.png\" alt=\"\" class=\"wp-image-14221\"\/><\/figure>\n<!-- \/wp:image -->\n\n<!-- wp:quote -->\n<blockquote class=\"wp-block-quote\"><!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\"><em>Judy Vorndran, lead partner of state and local tax at TaxOps, testified before the Colorado Senate Finance Committee on January 28, 2025. She addressed SB25-018 and SB25-046, proposed legislation that would create a searchable database and enhance audit confidentiality. Below is a summary of her remarks<\/em>.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\"><em>Following testimony and discussion, the Finance Committee unanimously passed both bills. SB25-018 now moves to the Committee on Appropriations while SB25-046, as amended, has been referred to the full Senate and placed on the Senate consent calendar.<\/em> <\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph {\"align\":\"center\"} -->\n<p class=\"has-text-align-center\"><em>\"It was an amazing experience to look in all of their faces and explain why these laws make Colorado more competitive and are good for both government and taxpayers<\/em>,\"<em>  ~ Judy Vorndran <\/em><\/p>\n<!-- \/wp:paragraph --><\/blockquote>\n<!-- \/wp:quote -->\n\n<!-- wp:group {\"layout\":{\"type\":\"constrained\"}} -->\n<div class=\"wp-block-group\"><!-- wp:spacer {\"height\":\"34px\"} -->\n<div style=\"height:34px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:heading {\"textAlign\":\"center\"} -->\n<h2 class=\"wp-block-heading has-text-align-center\">Testimony on SB25-018, Online Search of Sales and Use Tax, and SB25-046, Local Government Tax Audit Confidentiality Standards<\/h2>\n<!-- \/wp:heading -->\n\n<!-- wp:spacer {\"height\":\"42px\"} -->\n<div style=\"height:42px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer --><\/div>\n<!-- \/wp:group -->\n\n<!-- wp:paragraph -->\n<p>Good afternoon, members of the <a href=\"https:\/\/leg.colorado.gov\/committees\/finance\/2024-regular-session\" target=\"_blank\" rel=\"noopener\" title=\"Senate Finance Committee\">Senate Finance Committee<\/a>. My name is <a href=\"https:\/\/taxops.com\/judith-vorndran\/\" target=\"_blank\" rel=\"noopener\" title=\"Judy Vorndran\">Judy Vorndran<\/a>. I am a partner in the tax specialty firm TaxOps and a member of the &nbsp;Sales and Use Tax Simplification Task Force.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>I am here to testify in support of two bills, SB25-018 and SB25-046. A summary of my statement follows.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:spacer {\"height\":\"43px\"} -->\n<div style=\"height:43px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 class=\"wp-block-heading\">SB25-018, Online Search of Sales and Use Tax<\/h3>\n<!-- \/wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SB25-018 aims to create a searchable database for sales and use tax licenses and exemption certificates. This bill is crucial for improving transparency and compliance in our tax system.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 class=\"wp-block-heading\">Key Points<\/h3>\n<!-- \/wp:heading -->\n\n<!-- wp:list -->\n<ul class=\"wp-block-list\"><!-- wp:list-item -->\n<li><strong>Importance of a Searchable Database:<\/strong><\/li>\n<!-- \/wp:list-item -->\n\n<!-- wp:list-item -->\n<li>SB25-018 proposes the creation of a database at the state and department of revenue level, allowing taxpayers to look up licenses and entities.<\/li>\n<!-- \/wp:list-item -->\n\n<!-- wp:list-item -->\n<li><strong>Benefits for Taxpayers:<\/strong><ol><li>Having access to a searchable database would be a significant advantage for taxpayers. It would help them ensure that vendors are properly licensed and collecting the correct tax amounts.<\/li><\/ol><!-- wp:list {\"ordered\":true} -->\n<ol class=\"wp-block-list\"><!-- wp:list-item -->\n<li>This measure would also align Colorado with other states, such as Texas, which already have similar databases in place. These databases have proven to be extremely helpful for taxpayers in those states.<\/li>\n<!-- \/wp:list-item --><\/ol>\n<!-- \/wp:list --><\/li>\n<!-- \/wp:list-item -->\n\n<!-- wp:list-item -->\n<li><strong>Improved Compliance:<\/strong><!-- wp:list {\"ordered\":true} -->\n<ol class=\"wp-block-list\"><!-- wp:list-item -->\n<li>The searchable database would facilitate better compliance with tax laws. Taxpayers would be able to verify the status of vendors and themselves, reducing the risk of errors and ensuring accurate tax collection.<\/li>\n<!-- \/wp:list-item --><\/ol>\n<!-- \/wp:list --><\/li>\n<!-- \/wp:list-item --><\/ul>\n<!-- \/wp:list -->\n\n<!-- wp:paragraph -->\n<p>SB25-018 is a vital step towards enhancing transparency and compliance in Colorado's tax system. I urge the Committee to support this bill and help create a more efficient and taxpayer-friendly environment.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:spacer {\"height\":\"46px\"} -->\n<div style=\"height:46px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 class=\"wp-block-heading\">SB25-046, Local Government Tax Audit Confidentiality Standards<\/h3>\n<!-- \/wp:heading -->\n\n<!-- wp:paragraph -->\n<p>SB25-046 addresses the confidentiality standards for local government sales or use tax audits. This bill would both protect taxpayer information and ensure fairer audit practices.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:heading {\"level\":3} -->\n<h3 class=\"wp-block-heading\">Key Points<\/h3>\n<!-- \/wp:heading -->\n\n<!-- wp:list {\"ordered\":true} -->\n<ol class=\"wp-block-list\"><!-- wp:list-item -->\n<li>Confidentiality Concerns:<ol><li>SB25-046 aims to establish uniform confidentiality standards for local government tax audits. This is important because third-party auditors often conduct these audits, and there are concerns about how taxpayer information is handled and shared.<\/li><\/ol><!-- wp:list {\"ordered\":true} -->\n<ol class=\"wp-block-list\"><!-- wp:list-item -->\n<li>Currently, third-party auditors are not always licensed professionals, and there is no regulation ensuring their confidentiality practices. This raises significant concerns about the protection of sensitive taxpayer information.<\/li>\n<!-- \/wp:list-item --><\/ol>\n<!-- \/wp:list --><\/li>\n<!-- \/wp:list-item -->\n\n<!-- wp:list-item -->\n<li>Issues with Third-Party Auditors:<ol><li>Many home-rule cities do not have captive auditors and rely on third-party auditors who may conduct audits on behalf of multiple jurisdictions. This can lead to inefficiencies and increased taxpayer burdens.<\/li><\/ol><!-- wp:list {\"ordered\":true} -->\n<ol class=\"wp-block-list\"><!-- wp:list-item -->\n<li>There are instances where third-party auditors may target large taxpayers, leading to multiple audits across different cities. This practice is also burdensome and raises concerns about the confidentiality of taxpayer information.<\/li>\n<!-- \/wp:list-item --><\/ol>\n<!-- \/wp:list --><\/li>\n<!-- \/wp:list-item -->\n\n<!-- wp:list-item -->\n<li>Need for Regulation:<ol><li>There is a need for stricter regulation and oversight of third-party auditors to ensure they adhere to uniform confidentiality standards. This includes establishing ethical and fiduciary duties similar to those required of licensed professionals.<\/li><\/ol><!-- wp:list {\"ordered\":true} -->\n<ol class=\"wp-block-list\"><!-- wp:list-item -->\n<li>The bill also highlights the importance of transparency in the contracts between cities and third-party auditors. These contracts should be subject to public scrutiny to ensure accountability.<\/li>\n<!-- \/wp:list-item --><\/ol>\n<!-- \/wp:list --><\/li>\n<!-- \/wp:list-item --><\/ol>\n<!-- \/wp:list -->\n\n<!-- wp:paragraph -->\n<p>SB25-046 is essential for protecting taxpayer information and ensuring fair audit practices. I urge the Finance Committee to support this bill and help create a more transparent and accountable audit process. <\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:paragraph -->\n<p>I would be happy to answer related questions you may have, and I thank you for the opportunity to weigh in on these important pieces of legislation.<\/p>\n<!-- \/wp:paragraph -->\n\n<!-- wp:spacer {\"height\":\"57px\"} -->\n<div style=\"height:57px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:buttons {\"layout\":{\"type\":\"flex\",\"justifyContent\":\"center\"}} -->\n<div class=\"wp-block-buttons\"><!-- wp:button -->\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/taxops.com\/contact\/\">Talk to a Business Tax Advocate<\/a><\/div>\n<!-- \/wp:button --><\/div>\n<!-- \/wp:buttons -->\n\n<!-- wp:spacer {\"height\":\"53px\"} -->\n<div style=\"height:53px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<!-- \/wp:spacer -->\n\n<!-- wp:separator -->\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n<!-- \/wp:separator -->\n\n<!-- wp:heading -->\n<h2 class=\"wp-block-heading\">Read more<\/h2>\n<!-- \/wp:heading -->\n\n<!-- wp:latest-posts \/-->","_et_gb_content_width":"","spt_transcript":"","footnotes":""},"categories":[230,225,228,723,229,226],"tags":[252,1145,284,1144,361,126,26,265,1135,492,41,1134,18,19,316,222,30,810,101,799,605,38,262,79,267,620,80,1138,1137,74,128],"class_list":["post-15675","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asc-740","category-events","category-federal-tax","category-podcast","category-state-and-local","category-tax-news","tag-accountant","tag-advocate","tag-cfo","tag-colorado-society-of-cpa","tag-continuing-education","tag-cpa","tag-cpe","tag-finance-professional","tag-iaas","tag-leadership","tag-nexus","tag-saas","tag-sales-and-use-tax","tag-sales-tax","tag-salt","tag-software","tag-state-and-local-tax","tag-state-income-tax","tag-state-tax","tag-tax-advisor","tag-tax-automation","tag-tax-compliance","tag-tax-planning","tag-tax-preparer","tag-tax-professional","tag-tax-professionals","tag-tax-provider","tag-tax-tools","tag-tax-vendors","tag-taxops","tag-wayfair"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/taxops.com\/wp-content\/uploads\/2026\/03\/State-Nexus-Demystified-Podcast.png","_links":{"self":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/15675","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/comments?post=15675"}],"version-history":[{"count":1,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/15675\/revisions"}],"predecessor-version":[{"id":15676,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/15675\/revisions\/15676"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media\/15642"}],"wp:attachment":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media?parent=15675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/categories?post=15675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/tags?post=15675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}