TaxConnections

 
 

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Please enter your input in search

Archive for Wayfair Decision

US Supreme Court Wayfair Ruling Impacts Non-US Companies

Darlene Hart4

A US Supreme Court ruling last year is expected to impact every company that sells goods or services into the US within months, or even weeks and days. In many places, it has already begun.

The ruling, South Dakota v. Wayfair, is considered precedent-setting because of its finding that US states may charge tax on purchases made to individuals and businesses within their borders by out-of-state sellers, even if these sellers don’t have a physical presence in the state.

(Wayfair is an NYSE-listed e-commerce company based in Boston, Massachusetts. Two other defendants in the case, Overstock.com Inc. and Newegg, Inc., are also US-based internet retailers.)

Until the Supreme Court’s decision, states had the authority to impose a sales tax collection obligation only on businesses that were physically present within their borders.

Read more

Happy Anniversary – The South Dakota V. Wayfair Inc. Decision

Monika Miles On Wayfair Decision

It’s been just over a year since the U.S. Supreme Court handed down its landmark decision in South Dakota v. Wayfair Inc. on 6/21/18. This key ruling  paved the way for  states to enact economic nexus legislation and thereby more easily require companies to collect, remit and report sales tax.  This decision quickly changed the sales tax world in a big way, particularly for on-line retailers, but also for many other companies.

The Supreme Court’s ruling in June 2018 overturned the Quill decision of 1992 which established physical presence for nexus standards. The Wayfair decision established the concept of economic nexus, but did not automatically make economic nexus the law of the land for all 50 states. The High Court’s decision was that South Dakota’s economic nexus law was constitutional. Since this ruling, most states have  enacted some type of economic nexus legislation as it pertains to sales tax. As we describe in a previous blog, economic nexus is based upon the amount of sales or number of transactions in the state. If a certain threshold is met, nexus is deemed to be created. For instance, in South Dakota, economic nexus is created in if an out of state company makes sales of products or services into South Dakota in excess of $100,000 or has 200 or more transactions.

What have We Learned?

Read more

Internet Sales – The Wayfair Case

Monika Miles And Internet Sales Tax
South Dakota v. Wayfair, Inc.  – THE Case

On June 21, 2018, the U.S. Supreme Court ruled 5-4 in favor of overturning its 1992 decision in Quill, which set a standard requiring substantial physical presence before a state could enforce the sales tax collection responsibilities on a seller. In the current case, South Dakota v. Wayfair, Inc., writing for the Court’s majority, Justice Anthony Kennedy indicated “…the Court concludes that the physical presence rule of Quill is unsound and incorrect. The Court’s decision in Quill Corp v. North Dakota, 504 U.S. 298 (1992), and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753 (1967), should be, and now are, overruled.”

Read more

Wayfair And California – Yes, Indeed! (Part 2)

Monika Miles _ Part 2

It has been almost a year since the U.S. Supreme Court handed down its landmark decision in South Dakota v. Wayfair Inc. (June 2018) , making  it easier for states across the country to enact nexus triggering legislation, and ultimately leading to the collection of sales tax  from companies doing business in various states.

The Supreme Court’s ruling in June 2018 did not automatically make economic nexus the law of the land for all 50 states. The Court ruled  that South Dakota’s economic nexus law was constitutional. (The state had enacted legislation which stated that economic nexus is created in if an out of state company makes sales of products or services into South Dakota in excess of $100,000 or has 200 or more transactions in the state within a year.) However, since this ruling, over 35 states have enacted similar economic nexus legislation. As we describe in a recent blog, economic nexus is based upon the amount of sales or number of transactions in the state. If a certain threshold is met, nexus is deemed to be created.

Read more

Four States With New Economic Nexus Legislation

Monika Miles - 4 More States And Nexus

Following last year’s Wayfair Supreme Court case, which set precedent for states to enact economic nexus provisions, legislatures across the country have defined and implemented new online sales tax laws.

Although many states quickly implemented economic nexus provisions and have already started collecting online sales tax, there are some that have decided to take a little bit of extra time.

Arkansas’ Online Sales Tax Legislation

Here are four states that recently passed online sales tax provisions. Keep reading for the details!

Quick Arkansas Highlights:
  • Passed? Yes
  • Effective date? July 1, 2019
  • Thresholds? 200 separate transactions or sales exceeding $100,000 of tangible personal property, taxable services, digital codes or specified digital products

Read more

The States Are Going Too Far With Wayfair: Commentary From A Recently Retired CPA

Take Action
This Very Thoughtful Commentary Was Provided In Yesterday’s Post – We Want To Know What You Think!

“I continue to be greatly disturbed by what is occurring regarding this extremely complex and current economic issue. I understand fully that the US Supreme Court has given approval to the actions being undertaken by states all across this country through its decision concerning Wayfair. But, I believe that the states are going too far. I have dealt with states and sales tax audits and auditors for 50 years. Both in industry and in public accounting. I have represented clients as an expert witness in court cases.
I have said and written this before. I will say it to anyone that will listen. To require companies that have no tangible connection with a state that merely sell into a state on the internet to register then collect then remit then be audited then be assessed for any tax inadvertently not paid plus a penalty and interest for having nothing in the state for which the state provides services to the company is not right. It akin to the oppressed system that existed in England more than 100 years ago.

Read more

Sleeping Giants Awaken: California, Texas And Wayfair

Monika Miles - What Is Nexus.

In the United States, the sales tax landscape has changed drastically due to the recent U.S. Supreme Court Case of South Dakota v. Wayfair (June 2018). Following this landmark decision which made it easier for companies to create nexus in states, many states have enacted legislation which establishes guidelines, thresholds for economic nexus. In a previous blog, we talked about this epic decision.

What is Economic Nexus?

In the past, companies needed to have physical presence, or “boots on the ground,” in a state in order to have nexus (or taxable presence) in a state. This meant that a company needed to have offices, inventory, employees, or contractors in a state for a certain amount of time. Companies now don’t necessarily need to have physical presence in a state for them to create nexus; they now can have nexus in a state by virtue of economic nexus. Economic nexus essentially means that companies with sales of a certain dollar amount or a certain number of transactions with a state are required to register, collect and remit sales tax. Some states require both criterion. Additionally, note that some states base their economic threshold on taxable sales, while other states mention gross sales.

Read more

The Supreme Court Wayfair Case Continues To Make Headlines – California And Texas

Monika Miles - The Wayfair Case Continues To Make Headlines

It’s been over three months since the Supreme Court handed down its landmark decision in South Dakota v. Wayfair Inc., which made it easier for companies to create nexus in states. In turn, this made it easier for states to collect sales tax revenue from companies doing business in the state.

The Supreme Court’s ruling did not automatically make this the law of the land for all 50 states. The high court’s decision was that South Dakota’s economic nexus law was constitutional. Since this ruling, states have been jumping on the economic nexus bandwagon by enacting similar legislation. As we describe in a recent blog, economic nexus is based upon the amount of sales or number of transactions in the state. If a certain threshold is met, nexus is deemed to be created.

Read more

Economic Nexus In Wake Of Wayfair Decision

Monika Miles - Economic Nexus In Wake Of Wayfair Decision

In the United States, the sales tax landscape is drastically changing due to the recent U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc. In a previous blog, we talked about how the High Court made a landmark decision in June of 2018 that makes it easier for companies to create nexus in states. It ruled in its monumental decision, that it is constitutional for the State of South Dakota to enact an economic nexus law.

As a result, more states are jumping on the economic nexus bandwagon and enacting economic nexus laws too. States are eager to collect sales tax and, in theory, want to make it easier for companies to pay their taxes. In addition to physical presence, if companies also have economic nexus in a state, that qualifies them to pay sales tax to the state, provided the state has enacted an economic nexus statue.

Read more