On June 14, 2022, the Senate Finance Committee heard testimony on the impact on small businesses and remote sales of the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080, 201 L. Ed. 2d 403 (2018).
In Wayfair, the U.S. Supreme Court ruled that a business’s physical presence in a state (or lack thereof) wasn’t determinative for purposes of whether a state could require the business to collect sales and use taxes from customers located in the state. Overturning decades of precedent, the decision effectively gave states the green(ish) light to force remote sellers to collect sales and use taxes.
Witnesses before the committee discussed a number of difficulties that remote sellers were having in complying with tax collection requirements across multiple states. These include dealing with varying dollar and transaction thresholds, different items subject to sales and use tax, the complexity of local taxes, and costs associated generally with staying compliant across multiple jurisdictions.