At the beginning of a boxing match announcers will often discuss the "tale of the tape" This usually outlines which boxer has a longer reach (longer arms) and therefore may have an advantage in the bout. States are extending their reach in an effort to create an advantage in the bout and to raise revenues.
Many states are beginning to push harder on the concept of "economic nexus". Generally states can only tax businesses that have nexus in their state. This typically means that a taxpayer has property located in or employees that work within a state.
In our "virtual business world" physical presence is often not needed to derive sales or earning from a particular state. Therefore, states are pushing the concept of economic nexus and redefining the terms "doing business" and "active solicitation". The Tax Adviser has a great article outlining some states' efforts in this regard.
New York State recently passed legislation that intends to require that non-residents include additional income on a NYS non-resident tax return. 2010 changes to the NYS tax law change the rules related to trade or business income of non-residents and the treatment of certain S corporation income of non-residents.(Non-resident trade or business income and Non-resident income of S corporation stockholders)
Expect the states to keep pounding away...
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