As states continue to face budget challenges, nexus is a bigger issue now than in the past. States are becoming more aggressive in seeking revenue, and a popular source of this revenue are out-of-state companies. New initiatives between states, such as the recent streamlined sales tax initiative, will greatly increase the amount of information sharing between states. Certain activities, as insignificant as they may seem, may establish nexus (a connection with a state that subjects you to its tax laws). You unknowingly may have had nexus with a state for many years. You might even be responsible for back sales taxes, franchise taxes and income taxes, penalties and interest for past years.