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On-Line Retailers And Remote Sellers: Sales And Use Taxes



On-Line Retailers And Remote Sellers: Sales And Use Taxes

The Supreme Court of the United States’ decision in Wayfair, in June 2018, changed the landscape for sales and use taxes nexus for on-line retailers and remote sellers.  Due to budgetary deficits the states are facing due to the downturn in the economy and the Covid-19 Pandemic, states will increase audit activity to raise money.  Companies must be prepared and be proactive in order to avoid or reduce any state tax assessments.

The Wayfair decision lowered the bar in which a company has nexus with a state.   Prior to Wayfair, a company needed a physical presence in the state to be required to collect and remit sales and use taxes.  After Wayfair, states now require an economic presence, generally based on a threshold of sales into the state to create nexus with the state.  Please note, even if a company does not meet the economic thresholds for sales or transactions, as the case may be, but has a physical presence in the state, then the company has nexus with the state because of the physical presence and must register for sales and use taxes in such state.

As a result of the Wayfair decision, all states that impose a sales and use tax, except Florida and Missouri, have adopted an economic nexus standard.  The economic threshold for each state is reflected below. Note that Alaska, Delaware, New Hampshire, Oregon, and Montana do not impose a state sales and use tax.

There are a lot of questions regarding the thresholds amounts by each state.  For example, are all sales counted, gross sales, or just taxable sales?  Do I include sales in which the product is being resold by my customer?   Do I include sales of my product that are made through marketplace facilitators or just direct sales to customers?

States have different meanings on what sales are included in the thresholds.   Have any any questions?  Contact George Rendziperis at 512-663-0132.

State-By-State Economic Nexus Thresholds

States Economic Thresholds
Alabama Remote Sellers and Marketplace Facilitators$250,000

 

Arizona Remote Sellers$200,000 (2019); $150,000 (2020);

$100,000 (2021)

 

Marketplace Facilitators

$100,000

Arkansas Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions

 

California Remote Sellers and Markplace Facilitators$500,000
Colorado Remote Sellers and Markplace Facilitators$100,000
Connecticut Remote Sellers$100,000 and 200 transactions

 

Marketplace Facilitators

$250,000

District of Columbia Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Florida N/A
Georgia Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Hawaii Remote Sellers and Markplace Faciliators$100,000 or 200 Transactions
Idaho Remote Sellers and Markplace Faciliators$100,000
Illinois Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Indiana Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Iowa Remote Sellers and Marketplace Facilitators$100,000
Kansas No Minimum Thresholds
Kentucky Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Louisiana Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Maine Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Maryland Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Massachusetts Remote Sellers and Marketplace Facilitators$100,000
Michigan Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Minnesota Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Mississippi Remote Sellers and Marketplace Facilitators$250,000
Missouri N/A
Nebraska Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Nevada Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
New Jersey Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
New Mexico Remote Sellers and Marketplace Facilitators$100,000
New York Remote Sellers and Marketplace Facilitators$500,000 and 100 Transactions
North Carolina Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
North Dakota Remote Sellers and Marketplace Facilitators$100,000
Ohio Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Oklahoma Remote Sellers and Marketplace Facilitators$100,000
Pennsylvania Remote Sellers and Marketplace Facilitators$100,000
Rhode Island Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
South Carolina Remote Sellers and Marketplace Facilitators$100,000
South Dakota Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Tennessee Remote Sellers and Marketplace Facilitators$100,000
Texas Remote Sellers and Marketplace Facilitators$500,000
Utah Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Vermont Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Virginia Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Washington Remote Sellers and Marketplace Facilitators$100,000
West Virginia Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Wisconsin Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions
Wyoming Remote Sellers and Marketplace Facilitators$100,000 or 200 Transactions

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