Wayfair Case | TaxConnections

27 Jul 2023

Unravelling The Impact: How The Wayfair Case Sales Tax Legislation Has Shaped The Ecommerce Landscape

In e-commerce, where digital marketplaces transcend geographical boundaries, ongoing sales tax legislation in states across the country has emerged as a crucial factor for the success and sustainability of online businesses. With governments around the globe recognizing the immense economic potential of e-commerce, the introduction of sales tax regulations here in the US has become a pressing reality. In the wake of the Wayfair case, compliance with these legislative measures has now become paramount for e-commerce businesses, as failure to adhere to the evolving tax landscape can result in significant financial consequences and reputational damage.

In this article, we explore the intricate implications of sales tax legislation on e-commerce businesses, shedding light on the challenges they face and the strategies they adopt to ensure compliance in this complex regulatory environment.

Overview of Recent Sales Tax Legislation

The Wayfair decision and its impact on sales tax laws
The Wayfair decision, a 2018 landmark ruling by the US Supreme Court, transformed the landscape of sales tax legislation for ecommerce businesses. This decision enabled states to craft legislation that would enable them to enforce sales tax collection from out-of-state sellers based on economic nexus thresholds. The Wayfair decision overturned the previous physical presence requirement and paved the way for economic nexus laws that determine sales tax obligations based on sales volume or transaction thresholds.
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Written by Monika Miles | Posted in Wayfair Case • Wayfair Decision

05 Jan 2021

Frequently Asked Questions: Sales And Use Taxes Economic Nexus And Wayfair (Part 2)

PART 2: IF A TAXPAYER MEETS THE SALES THRESHOLD IN A STATE, WHAT MUST WE DO NOW?

These frequently asked questions build on our prior series of FAQs.

Q: Once a taxpayer meets the sales threshold of a state, what must be done to be compliant with the state’s tax laws?

A: You must register for sales and use taxes with the state. Depending on the state and jurisdiction, you may need to register with the local jurisdiction or parish. Please note some states may require you to register with the state’s Secretary of State before obtaining a sales tax permit from the state.

Q: How often will I need to file sales and use tax returns?

A: It will depend on each state. The state will assign you a filing frequency based on certain criteria it has established. The frequency will be either monthly, quarterly or yearly.

Written by George Rendziperis, J.D. | Posted in Economic Nexus • Sales And Use Tax • Wayfair Case

06 Nov 2019

Economic Nexus Versus Cookie Nexus: What You Need To Know

Monika Miles - Economic Nexus Versus Cookie Nexus

Although the precedent for economic nexus was set in June 2018, states were attempting to come up with ways to collect and remit sales tax from online transactions long before the Wayfair case made it to the courts.

Massachusetts and Ohio, for example, decided to define the computer code from internet cookies as a tangible item that could establish a physical presence nexus. However, once Wayfair passed, was this “cookie nexus” still in effect? The answer is, “Yes.” However, as always, regulations are still more complicated and confusing.

Massachusetts’ Cookie And Economic Nexus Rules

As Avalara explains:

Massachusetts’ economic nexus provisions require remote sellers to collect and remit state sales tax if the sales are greater than $100,000 in the current or previous calendar year. However, if you make sales of less than $100,000 into the state, you fall under a small seller exception and don’t need to worry about sales tax.
The cookie nexus required companies with more than $500,000 in internet sales and more than 100 transactions to collect and remit sales tax, if the company placed “cookie” onto the computers of MA customers. If your business falls under these thresholds, the provisions don’t apply to you.

Written by Kat Jennings | Posted in Cookie Nexus • Wayfair Case