Sales tax will never be the same again after South Dakota v. Wayfair, as a majority of states jump on this new opportunity to tax remote sellers.
Shown above: remote seller nexus by state as of October 4, 2018
U.S. sales tax will never be the same again, especially for online sellers.
Why is that? Well, a Supreme Court ruling on June 21st, 2018 threw out the idea that liability for sales tax had to be based on having some sort of physical presence in the state.
Now, due to the South Dakota v. Wayfair case, states can introduce something called economic nexus. There are no tests of physical presence at all for economic nexus. Instead, a seller can become liable to sales tax based on the total number of orders shipped to customers in that state, or the total dollar value of those orders.
Today, 29 U.S. states have adopted economic nexus, and more could follow suit. How did this seismic shift in sales tax come about? What are online sellers’ new obligations, and what do they need to do to fulfill them?
We’ll also look at the services provided by post sponsor Avalara, to help sellers handle their sales tax responsibilities.