Alert: Attention Businesses with Online Sales
On June 21, 2018, the U.S. Supreme Court issued its highly anticipated decision in the case of South Dakota v. Wayfair, Inc., 138 S.Ct. 2080 (2018), allowing states to require online retailers to collect sales tax – even in areas where they do not have a physical presence. Remote sellers of taxable products and services need to immediately evaluate whether they are prepared to register to collect and remit taxes wherever a material portion of their products are or may be delivered. While many taxing jurisdictions will still need to pass revised regulations in light of Wayfair, the assumption should be that all will jump on board quickly with “economic nexus” legislation similar to South Dakota’s test of at least $100,000 in sales or 200 transactions. Mid-sized companies with small physical footprints but broad sales may be hit hardest by the administrative burdens triggered by this decision.
