Are you a Remote Seller?
A Remote Seller is generally a seller that does not have a physical presence in a state but who sells products or services for delivery into that state.
If the answer to that question is YES, then the U.S. Supreme Court decision in the case of South Dakota v. Wayfair Inc. has likely created new sales tax filing requirements for your business potentially in every state. On June 21, 2018, the Supreme Court overturned a prior longstanding decision that prevented state taxing authorities from imposing sales tax filing requirements on remote sellers unless they had physical presence in their state. Now, if a business exceeds certain sales dollar or transaction (economic) thresholds, it may be required to register and collect and remit sales tax for that state.
For example, if your business sells and ships over $100,000 of products to customers in Illinois or you make over 200 sales to customers in Michigan (regardless of the dollar amount) you may be required to start collecting sales tax in those states. Unfortunately for businesses, the states have imposed different filing thresholds, each of which are comprised of different factors that remote sellers need to understand in order to determine whether they are subject to the state’s sales tax filing requirements.
These filing thresholds apply to all businesses (domestic and foreign) that makes sales into U.S. states in which they do not have physical presence. These laws affect all businesses; not just those that sell products online or through internet marketplaces. A manufacturer or retailer who does not make any online sales but sells to customers in various states can be considered a remote seller just the same.
Should my Business be collecting sales tax?
Our State and Local Tax team can review your sales to determine whether your business exceeds Wayfair filing thresholds established by state taxing authorities and can advise you on potential filing requirements in these states.
Use the Contact Form to connect with a member of our State and Local Tax team to schedule a no-cost discussion about your potential sales tax filing requirements for states where your business is selling goods and services.
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