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.
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