Changes in employee activities, such as attending trade shows, impact physical nexus requirements by establishing a tax obligation for the business. In 2024, even occasional employee presence for business purposes, including trade shows, creates a physical nexus in California. This obligates businesses to:

• Register with CDTFA: Obtain a seller’s permit if not already registered.

• Collect and Remit Sales Tax: On taxable sales made within the state.

• Compliance Obligations: Ensure accurate tax collection based on buyer locations.

These changes ensure that businesses with any form of physical presence, even temporary, contribute to California’s tax revenue and comply with sales tax regulations, preventing tax avoidance through minimal physical interactions.