States Respond to Supreme Court Sales Tax Decision

Supreme Court

Todd J. Koch

By Todd J. Koch, CPA, MBT, CFP®

Since the decision in the South Dakota v. Wayfair case, states are continuing to determine their position. Many states already had economic laws in place and others introduced hard to understand requirements which includes noncompliance penalties. There are several different factors states are considering and it is important that a business understands individual states’ standards.

For South Dakota v. Wayfair, South Dakota’s economic nexus law comes into play for out-of-state sellers making more than $100,000 in sales or services or engaging in 200 plus separate sales of goods or services delivered to South Dakota.

States will continue to respond one by one upon review of the Wayfair decision and will provide guidance to affected sellers.

Here are some answers to some of the questions you may have:Personal Tax Advisors St. Paul - CPA Firm St. Paul

Does this mean I have to collect sales tax from every state?
There are exceptions for small sellers. The definition of small is not consistent between states.

Are there consistent rules for what is taxable between states?
You have to follow each state’s rules.

Are the laws retroactive?
Most states are looking at this prospectively. Some from the date of the decision and others on a specific date – for example Wisconsin is beginning October 1, 2018.

Have all the states decided what they will do?
Guidance is coming out weekly from different states. Some have called special sessions to deal with this issue.

We are monitoring this issue and will let you know more as information becomes available.

If you have any questions, please let us know.

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