Wayfair Decision | TaxConnections

09 Jan 2019

Sleeping Giants Awaken: California, Texas And Wayfair

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.

Written by Monika Miles | Posted in California • Texas Tax • Wayfair Decision

19 Oct 2018

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.

Written by Monika Miles | Posted in Monika Miles • Wayfair Decision

24 Aug 2018

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.

Written by Monika Miles | Posted in Economic Nexus • Wayfair Decision