INSTITUTIONAL EQUITY PARTICIPANTS fret about whether they give states a nexus to subject them to income taxes by investing in a project company set up as a partnership or LLC. A new survey suggests that most states say yes for partnerships and for LLCs treated as partnerships. However, a handful of states does not assert a nexus to tax for limited partners who lack full rights to participate in management. States in this category are New Jersey, Rhode Island, Tennessee, Kansas, New York and Virginia. Almost all states assert a nexus to tax where the entity is an LLC that the owner has elected to treat as “disregarded” for federal income tax purposes. The survey also found states are less likely to assert a nexus for imposing net worth and franchise taxes than for income taxes.