Question

JBT Food Services owns a production facility in Georgia. The products are then transported to their distribution warehouse in Mississippi by truck on a route through Alabama. In which states can the business be taxed?

Answer 1

Answer:

Georgia and Mississippi

Explanation:

In determining which state has the power to impose tax on JBT Food Services , We must first establish if there exist any nexus between the states and JBT Food Services. Nexus means connecting link between the tax payer and the tax jurisdiction. nexus can exist if a corporation has a production plant in a state or where the corporation frequently visit a state for business purpose. You are can only pay sales tax in states where you have a nexus.

JBT Food Services will pay tax in Georgia because it has production facility, it cannot pay in Alabama because it is only a transit point. The existence of distribution warehouse in Mississippi means there is a nexus between Mississippi and JBT Food Services