States React to the Wayfair Supreme Court Case

In response to the Supreme Court Case, South Dakota v. Wayfair, Inc., which now frees up states to levy taxes on sales of goods and services regardless of whether the seller has a physical presence in state, many states have already implemented state legislatures or issued guidance, and here is what know so far:

Idaho

The Tax Commission stated that it will adopt a new law that would require out-of-state retailers to collect Idaho sales tax on their in-state sales when the total in-state sales exceeds $10,000 in the previous year effective July 1, 2018.

Iowa

The state enacted economic nexus standard effective January 1, 2019.  Under the economic nexus standard, remote sellers are required to collect the state sales tax if it has in-state annual gross sale of $100,000 or more, or completed more than 200 in-state sales.

North Dakota

The Office of State Tax Commissioner issued a notice stating that unless the seller meets the small seller exception, the remote seller is required to register and begin collecting the tax in the state on October 1, 2018.

Rhode Island

The Department of Revenue issued a statement confirming that the economic nexus standard (that is similar to that of South Dakota) enacted in 2017 will be enforced.

Texas

The Texas Comptroller stated that it will evaluate the outcome of the Supreme Court case and may need to update its rules, however it does not intend to retroactively apply the new law to remote sellers.

Vermont

The Department of Taxes stated that remote sellers meeting the economic nexus thresholds during any preceding 12-month period are required to register to collect and remit sales tax beginning July 1, 2018.

Mississippi

The Department of Revenue stated that the state requires any remote sellers who has annual gross sales greater than $250,000 to register and collect the tax from the in-state customers.

New Jersey

The state introduced to adopt an economic nexus rule (that is similar to that under South Dakota law).

Louisiana

Economic nexus rules similar to that of South Dakota was quickly introduced, if passed, would be effective August 1, 2018.

North Dakota

The Department of Revenue issued a statement confirming that the economic nexus standard (that is similar to that of South Dakota) enacted in 2017 will be enforced.

 

We expect more states will likely act quickly to amend their sales tax statutes to reflect the decision of the Supreme Court case and begin levying sales and use tax on any interstate sales that has substantial sales in the state without regard to the physical presence.  Multi-state retailers or service providers are recommended to closely monitor state legislative changes and current statutes to be compliance.

 

For additional detail on the Supreme Court Case, South Dakota v. Wayfair, Inc., please refer to our newsletter dated June 28, 2018.  http://www.kyjcpa.com/news-updates/supreme_court_overturns_quill/