2) Lexerd Company (Corporation) - cloud computing Facts: . . . . Develops prewritten computer software programs for architects and engineers Licenses the software on a subscription basis (Software as a Service) and provides upgrades and technical support to customers. The software is centrally hosted from the Lexerd's corporate headquarters in Cherry Hill, New Jersey and made available to customers over the network. The company's clients are located throughout the U.S, with a large concentration on the East Coast and Southwest. The company directs its digital advertising toward customers in these geographic areas. Customers order software online and their orders are approved by Lexerd personnel at the Cherry Hill HQ. Satellite offices are located in New York, Pennsylvania, and Virginia - full-time software engineers, sales representatives, and a small number of administrative staff are employed at these offices. Approximately 100 full-time software engineers also have "home offices" throughout the U.S.; these are not company business locations. In the current year, Lexerd employees attended trade shows in Arizona, California, Florida, Georgia, Indiana, North Carolina, and Texas. The employees exhibited Lexerd's products at these trade shows and also took orders for software programs. Lexerd employees also occasionally conduct on-site training seminars and sometimes provide consulting services for their largest customers at their facilities. . . . Questions: A) Based on the facts presented above, where do you think Lexerd Company would have substantial nexus for corporate income tax purposes? Explain. B) Does a state's "doing business" statute have any relevance in your determination of substantial nexus? Why? C) What additional information would you need to determine if Lexerd Company has taxable nexus in other states (in addition to those in your answer to A)? Assume that the transactions are sales of a service, sourced to the location of the user(s). D) Discuss the relevance of "home offices" and how a telecommuting employee(s) may potentially create nexus for Lexerd. E) Could the sale of prewritten computer software programs be protected under P.L. 86- 272 in certain states? Under what circumstances? (hint: consider the character of software) F) Do you think a cloud-based service provider, like Lexerd, that hires independent contractors to perform set-up or configuration services in a state would be sufficient to create corporate income tax nexus? Why? 2) Lexerd Company (Corporation) - cloud computing Facts: . . . . Develops prewritten computer software programs for architects and engineers Licenses the software on a subscription basis (Software as a Service) and provides upgrades and technical support to customers. The software is centrally hosted from the Lexerd's corporate headquarters in Cherry Hill, New Jersey and made available to customers over the network. The company's clients are located throughout the U.S, with a large concentration on the East Coast and Southwest. The company directs its digital advertising toward customers in these geographic areas. Customers order software online and their orders are approved by Lexerd personnel at the Cherry Hill HQ. Satellite offices are located in New York, Pennsylvania, and Virginia - full-time software engineers, sales representatives, and a small number of administrative staff are employed at these offices. Approximately 100 full-time software engineers also have "home offices" throughout the U.S.; these are not company business locations. In the current year, Lexerd employees attended trade shows in Arizona, California, Florida, Georgia, Indiana, North Carolina, and Texas. The employees exhibited Lexerd's products at these trade shows and also took orders for software programs. Lexerd employees also occasionally conduct on-site training seminars and sometimes provide consulting services for their largest customers at their facilities. . . . Questions: A) Based on the facts presented above, where do you think Lexerd Company would have substantial nexus for corporate income tax purposes? Explain. B) Does a state's "doing business" statute have any relevance in your determination of substantial nexus? Why? C) What additional information would you need to determine if Lexerd Company has taxable nexus in other states (in addition to those in your answer to A)? Assume that the transactions are sales of a service, sourced to the location of the user(s). D) Discuss the relevance of "home offices" and how a telecommuting employee(s) may potentially create nexus for Lexerd. E) Could the sale of prewritten computer software programs be protected under P.L. 86- 272 in certain states? Under what circumstances? (hint: consider the character of software) F) Do you think a cloud-based service provider, like Lexerd, that hires independent contractors to perform set-up or configuration services in a state would be sufficient to create corporate income tax nexus? Why