Does a Canadian manufacturer with no New York office, warehouse, or resident sales staff have enough nexus with New York to be required to register and collect sales tax, based only on trade-show attendance and occasional sales-visit trips by its own traveling salespeople?

Plain-English summary

Company X is a Canada-headquartered manufacturer that makes a sand-based specialty product used to maintain golf courses, manufactured entirely in Canada and shipped by common carrier; it doesn't install the product or perform any service in New York. It has no New York office, no property here, and no independent representatives or salespeople based in the state. It attends two New York trade shows a year (two days each) purely to provide technical information — no orders are taken there, and no promotional giveaways are handed out. Sales-lead follow-up happens over the phone or through visits by one or two of the company's own salespeople into New York once or twice a year, each trip lasting one to two days and covering roughly 5-10 customers. Other leads come from cold calls and referrals, and customers can also call an 800 number answered in Canada to place orders directly. There's no blanket mailing or solicitation campaign — about 35 existing New York customers each get roughly three loads of product per year. In a one-time, atypical transaction, the company also supplied product for an international volleyball event in New York City, installed by an unrelated third-party contractor it hired.

New York's vendor definition specifically reaches a business that solicits sales "by employees, independent contractors, agents or other representatives" and by reason of that solicitation makes sales to New York customers — regardless of how minor or infrequent that solicitation is. The Department found trade-show attendance alone (without taking orders) wouldn't create nexus by itself. But Company X does more: it dispatches its own salespeople into the state specifically to solicit sales from potential and existing customers, even if only once or twice a year. Under the controlling New York Court of Appeals precedent (Orvis Co. v. Tax Appeals Tribunal), the Due Process Clause requires only "some definite link, some minimum connection" between the state and the taxed activity, while the Commerce Clause requires "demonstrably more than a 'slightest presence'" — a bar that in-state solicitation by the seller's own personnel satisfies, even if brief and occasional.

The Department also addressed two things that, notably, did NOT need to carry the nexus analysis on their own: the one-time volleyball-event installation (unnecessary to resolve since the sales-visit activity was independently sufficient, though still "another instance" of the company's connection to the state), and the fact that the company's blending machine physically passes through New York en route to other destinations — the Department confirmed that merely transporting equipment through the state, without using it to deliver product or perform any other in-state function, would not by itself create nexus. With nexus established through the salesperson-visit activity, Company X must register as a New York vendor and collect tax on all its sales to New York customers going forward — not just the transactions directly tied to a sales visit.

What this means for you

Out-of-state or foreign manufacturers with only occasional in-state sales trips

Even brief, infrequent visits (once or twice a year, a day or two each) by your own salespeople to solicit business in New York can be enough to create nexus — there's no minimum-frequency safe harbor once genuine in-person solicitation by company personnel is involved.

Companies attending trade shows without taking orders

Trade-show presence alone, without accepting orders or engaging in other solicitation, is not by itself sufficient to establish nexus — but don't rely on that alone if your company separately sends salespeople into the state for other purposes.

Businesses whose equipment or vehicles merely pass through New York

Equipment or vehicles that cross through New York State solely in transit to other destinations, without being used to deliver product or perform any service in the state, doesn't by itself create nexus.

Accountants and tax professionals

This is a clean, compact citation for applying the Orvis Co. v. Tax Appeals Tribunal "minimum connection" / "more than a slightest presence" framework to the specific fact pattern of infrequent, brief in-state sales-solicitation trips by an out-of-state seller's own employees.

Common questions

Q: Does attending a trade show in New York create nexus by itself?
A: Not necessarily — attending trade shows without accepting orders or otherwise soliciting business, standing alone, was not found sufficient to establish nexus in this case.

Q: How often does a company's salespeople need to visit a state to create nexus?
A: There's no fixed minimum — here, visits of one to two days, occurring only once or twice a year, were enough because they involved actual solicitation of sales by the company's own personnel.

Q: Does equipment merely traveling through a state on its way elsewhere create nexus?
A: No — as long as the equipment isn't used to deliver product or perform any other function within the state, and isn't leased or licensed for use there, simply passing through doesn't establish nexus.

Citations and references

Statutes and regulations:

• Tax Law § 1101(b)(8)(i) (vendor; solicitation of business)
• Tax Law § 1131 (definitions; persons required to collect tax)
• Tax Law § 1134(a)(1)(i) (vendor registration requirement)
• 20 NYCRR § 526.10(a)(3) (vendor; solicitation by representatives)

Cases and prior rulings referenced:

• Orvis Company, Inc. v. Tax Appeals Tribunal, 86 NY2d 165, cert denied 630 US 989
• ESP, Inc., TSB-A-96(83)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2002.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a02_49s.pdf

Original ruling text

New York State Department of Taxation and Finance

Office of Tax Policy Analysis
Technical Services Division

TSB-A-02(49)S
Sales Tax
September 24, 2002

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S010921A

On June 26, 2001 the Department of Taxation and Finance received a Petition for Advisory
Opinion from Yvonne Greenberg, 800 Liberty Building, Buffalo, New York 14202-3508.
The issues raised by Petitioner, Yvonne Greenberg, for the period 9/1/98 to 5/30/01, are:
(1)

Whether, under the circumstances presented, Petitioner’s Client, Company X, has
sufficient nexus with New York State to satisfy the Due Process and Commerce
Clauses of the U.S. Constitution.

(2)

Whether Company X is a vendor for purposes of New York State sales and
compensating use tax and therefore, required to collect tax on its sales to New York
customers.

Petitioner submitted the following facts as the basis for this Advisory Opinion.
Company X is headquartered in Canada and produces a product using sand and other
ingredients for its customers throughout the United States and Canada. Its products are
manufactured in Canada. What is typically sold in New York State is a specialty product to
maintain golf courses. The product is delivered by common carrier. Company X does not install
its product or perform any service for its customers in New York. Company X has a blending
machine that it uses to blend sand for its products. The blender is used mainly in Canada, and
sometimes in the United States, but it has never performed any work in New York. The blender has
crossed the border and has been transported through New York.
Company X had a one-time transaction in New York where it supplied its product for an
international volleyball event in New York City and hired a third party New York based contractor
to place Company X’s product at the site. This type of activity is not a common practice for
Company X, but an exception.
Company X does not maintain an office in New York State or have property, independent
representatives or salespersons located in New York. Company X attends two trade shows in
New York a year, each with a two day duration, but does not accept orders. The purpose of the trade
shows is to provide technical information. Literature about Company X’s product is available at the
shows, but no promotional materials such as t-shirts or other items are distributed. Follow-ups for
sales leads are accomplished over the phone, or by visits from one or two salespersons into the State
one to two times per year. A salesperson may visit 5 to 10 customers in one visit depending on
where the potential customer may be. The duration of the salesperson's visit is approximately one

-2­
TSB-A-02(49)S
Sales Tax
September 24, 2002
to two days. Other leads come from “cold calls” and referrals. The customer can also call an 800
number that is answered by personnel in Canada who are authorized to take orders. There are no
blanket mailings or blanket solicitations of customers in New York. There are approximately
35 existing customers located in New York, each receiving three loads of product per year. Apart
from the sales visits described above, Company X does not come into the New York to solicit
orders; nor does it otherwise enter into New York to inspect or service any of its customers.
Applicable Law and Regulations
Section 1101(b)(8)(i) of the Tax Law defines "vendor" to include, in part:
(A) A person making sales of tangible personal property or services, the
receipts from which are taxed by this article;
*

*

*

(C) A person who solicits business either:
(I) by employees, independent contractors, agents or other representatives;
or (emphasis added)
(II) by distribution of catalogs or other advertising matter, without regard to
whether such distribution is the result of regular or systematic solicitation, if such
person has some additional connection with the state which satisfies the nexus
requirement of the United States constitution. . . .
and by reason thereof makes sales to persons within the state of tangible
personal property or services, the use of which is taxed by this article;
Section 1131 of the Tax Law provides, in part:
Definitions–When used in this part IV,
(1) "Persons required to collect tax" or "person required to collect any tax
imposed by this article" shall include: every vendor of tangible personal property or
services. . . .
*

*

*

(4) "Property and services the use of which is subject to tax" shall include:
(a) all property sold to a person within the state, whether or not the sale is made
within the state. . . .

-3­
TSB-A-02(49)S
Sales Tax
September 24, 2002
Section 1134 (a)(1)(i) of the Tax Law provides, in part:
Every person required to collect any tax imposed by this article . . .
commencing business or opening a new place of business, (ii) every person
purchasing or selling tangible personal property for resale . . . shall file with the
commissioner a certificate of registration, in a form prescribed by the commissioner,
at least twenty days prior to commencing business or opening a new place of
business. . . .
Section 526.10(a)(3) of the Sales and Use Tax Regulations provides, in part:
A person who solicits business by employees, independent contractors,
agents or other representatives and by reason thereof makes sales to persons within
the State of tangible personal property or services, the use of which is subject to tax,
is a vendor. (emphasis added)
Example 5:

A California based company uses independent manufacturers'
representatives, who are residents of New York State, to sell
its product in New York. The California company is a vendor.

Opinion
Company X does not maintain an office in New York State, or have property, independent
representatives or salespersons located in New York. Company X attends two trade shows a year,
each with a two day duration, but does not accept orders. Follow-ups for leads are accomplished
over the phone, or by sales visits from one or two salespersons into New York one to two times per
year. A salesperson may visit 5 to 10 customers in one visit depending on where the potential
customer may be. The duration of the salesperson's visit is approximately one to two days. Other
leads come from “cold calls” and referrals. The customer can also call an 800 number that is
answered by personnel in Canada who are authorized to take orders. There are no blanket mailings
or blanket solicitations of customers in New York. There are approximately 35 existing customers
located in New York, each receiving three loads of product per year.
While participation in a trade show in New York State alone would not necessarily establish
nexus, Company X also sends salespersons into New York to solicit sales from potential or existing
customers. See ESP, Inc., Adv Op Comm T&F, December 26, 1996, TSB-A-96(83)S.
As a result of these activities, Company X makes sales which are subject to tax. As stated
in Section 1101(b)(8)(i) of the Tax Law, the definition of "vendor" includes a person who solicits
business by employees, independent contractors, agents or other representatives and by reason
thereof makes such sales to persons within New York State.

-4­
TSB-A-02(49)S
Sales Tax
September 24, 2002
As indicated by the New York Court of Appeals in Orvis Company, Inc. v Tax Appeals
Tribunal,86 NY2d 165, 178, cert den 630 US 989, 133 LEd2d 426, the Due Process clause requires
that there be “some definite link, some minimum connection, between a state and the person,
property or transaction it seeks to tax.” The Commerce Clause, according to Orvis, supra, requires
“demonstrably more than a 'slightest presence'” of the vendor in a state in order for nexus to exist
and that presence may be established by the conduct of economic activities within the state by the
vendor's personnel or other representatives on its behalf. Thus, the solicitation of sales by Company
X's employees within New York State establishes a connection with New York which satisfies both
nexus requirements of the U. S. Constitution.
Whether the one-time transaction where Company X’s product was installed at the site of
an international volleyball event in New York City by a third party New York based contractor is
sufficient presence for nexus is not pivotal to the discussion here since Company X has sufficient
nexus with New York for the period in question through its other activities. It is, however, another
instance of Company X’s connection with and presence in New York State.
The movement of Company X’s blending machine through New York State to reach other
destinations would not, by itself, establish nexus, provided that the equipment is not used to deliver
product, or for any other purpose, in New York or leased or licensed for use in New York.
Since Company X has more than the slightest presence in New York State as a result of its
solicitation activities in New York, Company X is required to register with New York as provided
by Section 1134(a)(1) of the Tax Law and collect any tax due on all of its sales to New York
customers.

DATED: September 24, 2002

NOTE:

/s/
Jonathan Pessen
Tax Regulations Specialist IV
Technical Services Division

The opinions expressed in Advisory Opinions are
limited to the facts set forth therein.