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2. When does Maine have jurisdiction to impose a tax on a corporation?
When a corporation’s presence in, or connection with, a state reaches a certain level, the corporation is said to have “nexus” with that state, subjecting the corporation to the state’s income tax laws. Nexus with Maine is generally created by conducting business in Maine, or by owning or using property in Maine. MRS Rule 808 provides detailed criteria about activities that create Maine nexus. A determination about whether or not a corporation has nexus with Maine must be made in light of all of the relevant facts, and a physical presence in the state is not necessary to establish nexus in all circumstances. If you need assistance determining whether or not a corporation has nexus with Maine, you may complete a nexus questionnaire and send it to MRS with a cover letter that identifies who MRS should contact for more information. You must enter a response to every question. The questionnaire is available in the corporate income tax section of maine.gov/revenue/forms.
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