Refers to an entity's presence in another state
A corporation or LLC is considered to have physical presence (or nexus) in a state when it is operating physically in that state. Since most states do not provide objective criteria to assist corporations/LLCs to determine when they have physical presence, each case must be looked at separately.
The most obvious examples of physical presence would be when a company opens an office or wherehouse in a state and/or when the company hires employees or staff in that state and/or when a company starts to withhold sales taxes from product sales to customers in that state.
If a corporation or LLC is physically present in a state, but formed in another state, it would need to register for the authority to operate in that state, which is commonly referred to as "foreign authority".