Potential Sales Use Tax Changes Impact on Virginia Businesses

Posted on 06.04.18

Potential Sales Use Tax Changes Impact on Virginia Businesses

Terry Barrett, tax senior manager and leader in Keiter's state and local tax team, shared an op-ed featured in Virginia Business titled, "Supreme Court’s Wayfair case will impact Virginia businesses." This includes a look at the impact the South Dakota v. Wayfair, Inc. case will have on Virginia businesses with multistate operations and what these businesses should consider in light of these upcoming sales tax changes.

Updates on 2018 Potential Sales and Use Tax Changes


Virginia businesses selling in a multistate environment may find that they have additional sales-tax requirements in the near future.  On April 17, the U.S. Supreme Court heard oral arguments in the case South Dakota v. Wayfair, Inc., et. al. (Docket No. 17-494).  At issue is whether South Dakota (or any other state) may impose sales-tax collection requirements on out-of-state sellers that have no physical presence in the state but merely are selling via the internet (or mail-order) to customers in the state.  The court ruled in 1992 in Quill v. North Dakota that a seller must have a physical presence in a state in order to be required to collect and remit sales/use tax on sales to instate users.  Much has changed since 1992 in the way businesses sell products, and many states felt that the physical presence requirements are no longer relevant. 

The fact the court agreed to hear the case was viewed by many as a clear sign the physical presence requirements of Quill would be overturned.  However, the oral arguments and line of questioning by the justices on April 17 suggested the outcome of the case is uncertain and too close to call.  What was clear, though, were concerns by the justices over the potential retroactive application of their ruling, sales-tax compliance costs for small businesses, and the real magnitude of the revenues lost due to the physical requirement limitation.  The court’s decision is expected by the end of June.

Read more.

Questions on the potential changes facing sales and use taxes due to the South Dakota v. Wayfair case? We can help. Contact a member of the State and Local Tax team or Email | 804.747.0000

Additional State and Local Tax Resources:

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

State Efforts to Collect Sales Use Tax

State and Local Tax Obligations of Emerging Businesses

“Merging or acquiring? Don’t forget state and local taxes”

Federal Tax Reform: State and Local Implications

Tax Cuts and Jobs Act Overview

Posted by: Terry Barrett, CPA

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. You can read more of Terry’s state and local tax insights here.