Question: Where is advertising subject to state tax? Does advertising on google shopping create nexus?
Answer: Advertising may or may not be subject to tax, depending on how it is structured. For example, if a marketing campaign involves mailing out flyers to potential customers, those flyers would likely be subject to tax based on the destination of the potential customer. Any time tangible personal property is included as part of an advertising campaign, there is likely an associated sales or use tax consequence. Conversely, when an intangible marketing method such as online advertising is utilized, the campaign should not be subject to tax. (We do see many jurisdictions trying to tax it anyway!). Some states say online advertising does create nexus but in many states, it won’t.
