The United States Supreme Court has been asked to decide whether the Commerce Clause in the US Constitution permits a State to impose corporate income tax and franchise tax on a company with no physical presence in the taxing state. The initiative is intended in part to resolve the confusing and conflicting treatment of the nexus issue for income and franchise tax among different States. It was previously settled that physical presence is generally required for State sales tax.

Meanwhile, New York has decided the hard copy version of a publication that provided news, etc., was exempt from New York sales tax but the electronic version was taxable. (TSB-A-07 (6) S, NY Commissioner of Taxation and Finance.) New York also determined the sale of videos delivered electronically over the internet to customers' computers was not subject to sales tax (TSB-A-07 (11) S.

In other nexus news, an out-of-state taxpayer was deemed to have nexus in Texas for Texas sales tax purposes because of having two employees in Texas working from their homes. (Letter No. 200611818L, Texas Comptroller of Public Accounts, Nov. 16, 2006).

Canada, The United States and Australia have decided to open a second office of the Joint International Tax Shelter Information Centre (JITSIC) in London. Among other artificial arrangements, JITSIC members have identified and challenged a cross-border scheme involving improper deductions and unreported income from retirement accounts.