U.S. Supreme Court to Reconsider Economic Nexus Issues

By Terry Barrett, CPA, Tax Senior Manager

U.S. Supreme Court to Reconsider Economic Nexus Issues

As you may have heard, there has been a push by the states to require the collection of sales tax by out-of-state retailers essentially on internet sales.  However, the states have been limited by a US Supreme Court ruling back in 1992, Quill, where the Court ruled that one must have a physical presence in a state in order to be required to collect sales tax.  Thus, a lot of Internet sales have escaped taxation and there are estimates that the states have missed out on $13 billion in tax receipts.

The US Supreme Court agreed last Friday to revisit the issue this year, with oral arguments likely in April and a decision expected by the end of June. It appears that a few members of the Court already have opinions that Quill should be overturned.

It’s important to keep in mind that any proposed changes to economic nexus have not been finalized.  We will continue to monitor for any potential changes and keep you informed.

Questions on this topic? Contact your Keiter representative or our State and Local Tax team | 804.747.0000 | Email.

Additional Resources

“Withholding Taxes: Are you Compliant?”

“Will market-based sourcing affect you?”

“Sales Tax – New Rules on the Horizon?”

“Why Sales Tax Compliance is Important”

“Tax Amnesty for Online Marketplace Sellers”

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About the Author

Terry Barrett

Terry Barrett, CPA, Tax Senior Manager

Terry Barrett specializes in state and local tax concerns for her clients. She has over 30 years of experience working in the public and private accounting sector. She is a graduate of Virginia Commonwealth University.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.


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