Remote Sales Tax Collection After the Wayfair Decision

Keiter State and Local Tax team leader, Terry Barrett, shares her insights on the aftermath of the South Dakota v. Wayfair decision on online sales tax and how it will impact business across states and localities in the September/October 2018 issue of VSCPA’s Disclosures Magazine article, “After South Dakota v. Wayfair.” At issue was whether a state may impose sales tax collection requirements on out-of-state businesses that have no physical presence in the state, but who make sales or provide services to in-state customers.

After South Dakota v. Wayfair Excerpt:

“As reported in the March/April issue of Disclosures, the U.S. Supreme Court agreed to hear a case that had the potential to substantially change the way states and localities impose sales and use tax. The Court heard the oral arguments on April 17, 2018 — coincidentally or not, Tax Day — and issued its opinion on June 21, 2018. At issue was whether states may impose sales tax collection requirements on out-of-state businesses that have no physical presence in the state but to conduct sales to in-state customers.

In a 5-4 decision in South Dakota v. Wayfair, Inc., the Court overturned its prior rulings in the Quill (1992) and National Bellas Hess (1967) cases and said that physical presence is not required to impose sales/use tax collection requirements on out-of-state (remote) businesses selling in the state. The Court found the physical presence standard “unsound and incorrect.” The Court’s decision will have far-ranging tax implications and accounting impacts on businesses; however, it is too soon to know exactly what they are. What we do know, though, is that businesses selling taxable good and services may have tax collection requirements in states where they may not have in the past.”

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Source: VSCPA Disclosures Magazine

Additional Sales and Use Tax Resources:

Terry Barrett Talks Online Sales Tax Decision and Small Businesses with Inc. Magazine

Potential Sales Use Tax Changes Impact on Virginia Businesses

“Supreme Court’s Wayfair Case Will Impact Virginia Businesses”

Virginia Businesses Are Facing Potential Sales and Use Tax Changes in 2018

State Efforts to Collect Sales Use Tax

Sales and Use Tax Rules Facing Potential Changes