A number of states will begin enforcing their new sales tax filing requirements for remote sellers in the coming weeks. Since the U.S. Supreme Court’s decision in South Dakota v. Wayfair Inc. in June of last year, that eliminated Quill’s physical presence standard for sales tax nexus, just about every state has introduced economic nexus thresholds (i.e., sales over $100,000 or 200 transactions) requiring remote sellers to register, collect and remit sales tax if they exceed their threshold. A remote seller is generally any business that sells tangible personal property or services for delivery into a state, using the Internet, mail order, or telephone, without having physical presence in that state. Please note that this definition includes all businesses and is not limited to just those entities that sell or transact business over the internet.
Starting October 1, 2019, economic nexus thresholds will go into effect in the following states:
- Arizona [sales over $200,000 for 2019; sales over $150,000 for 2020; sales over $100,000 for 2021 & subsequent years]
- Kansas [no minimum threshold]
- Massachusetts [sales over $100,000]
- Tennessee [sales over $500,000]
- Texas [sales over $500,000]
In addition, starting November 1, 2019, economic nexus thresholds will go into effect in:
- Oklahoma [sales over $100,000]
If you are a remote seller with sales over the denoted threshold amounts in 2018 or 2019, then you should consider registering to collect and remit sales tax in the aforementioned states prior to the effective date. Currently, Kansas has no small-seller exception or minimum sales threshold and expects all remote sellers to collect and remit the applicable sales or use tax on sales delivered into the state. The Kansas legislature may need to pass new legislation before the Dept. of Revenue can authorize a small-seller exception for remote sellers.
There are other factors that remote sellers need to consider before registering, including their prior business activities in these states. If you have questions about remote seller filing requirements in these or other states, you can contact a member of our State and Local Tax team using the Contact Form below. Be sure to indicate “Wayfair” in Your Message and a member of our team will follow up to discuss your questions.