New Mexico Court of Appeals rules out-of-state internet retailer has nexus due to trademark goodwill generated by in-state retailer affiliate

April 2012


On April 18, 2012, the New Mexico Court of Appeals ruled that an out-of-state online retailer, LLC (BNC), had nexus for gross receipts tax (GRT) purposes because the goodwill generated by an in-state licensee of Barnes & Noble trademarks was imputed to BNC, another licensee of the same trademarks, who used the Barnes & Noble trademarks to make Internet sales to residents in New Mexico. [ LLC v. New Mexico Taxation and Revenue Department; New Mexico Court of Appeals No. 31,231 (April 18, 2012)]. The imputed goodwill helped BNC "establish and maintain" a New Mexico market and therefore established substantial nexus between New Mexico and BNC.

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