States Implementing New Sales Tax Filing Requirements Following Wayfair Decision

In the wake of the Supreme Court’s landmark decision in South Dakota v. Wayfair, Inc. on June 21, 2018 overturning the physical presence nexus standard for sales tax, many states have been moving quickly to implement new sales tax filing requirements similar to the legislation enacted in South Dakota that does not require a seller have physical presence in the state. South Dakota passed legislation in 2016 requiring “remote sellers” who engaged in more than 200 or more separate transactions or exceeded $100,000 of annual sales in the state to register and collect sales tax. (A  remote seller is any business that sells products or services to customers in a state using the internet, mail order, or telephone without having physical presence in that state.) 

A number of states have passed legislation similar to the South Dakota law in the past two years as well, while other states just recently adopted new regulations or issued administrative pronouncements, updating their sales tax filing requirements in a similar manner. 

Even though the Supreme Court remanded this case to the South Dakota Supreme Court to decide whether any other Commerce Clause objections may be raised concerning this law, the following states have already issued guidance about when their new sales tax filing requirements will become effective. These effective dates are: 

 July 1, 2018  October 1, 2018  December 1, 2018  January 1, 2019
 Hawaii  Alabama  Connecticut  Georgia
 Oklahoma  Illinois    Iowa
 Vermont  Indiana    Louisiana
   Kentucky    Nebraska
   Michigan    Utah
   Minnesota    
   New Jersey    
   North Dakota    
  Wisconsin    

*Not all of these states have implemented the same sales tax nexus thresholds as South Dakota.  

In addition to these jurisdictions, a host of other states, including Colorado, Maine, Massachusetts, Mississippi, Ohio, Pennsylvania, Rhode Island, Tennessee, Washington and Wyoming previously enacted expanded sales tax nexus legislation that impacts filing requirements for remote sellers. These policies vary by state, and we are anticipating additional guidance from these states’ taxing authorities regarding sales tax collection implications for remote sellers. 

Tronconi Segarra & Associates will continue to track the latest state-by-state sales tax developments related to the Wayfair decision and will issue further advisories as additional states indicate how they will be addressing this unprecedented shift in sales tax compliance. For more information, please contact a member of our State and Local Tax team at Salt-Team@tsacpa.com.

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