Where Economic Nexus is Headed Post Wayfair

This article was originally published on AccountingWeb, 9/10/2018.

There’s little doubt e-commerce businesses will feel the impact of the Wayfair decision, but as the states either introduce or dust off their economic nexus rules for remote sellers, one area where the state rules diverge is their measure of economic thresholds.

Economic nexus allows the states that embrace it to compel vendors from other states to collect their state sales taxes; previously, they could not be similarly compelled under the physical presence standard

The recent U.S. Supreme Court decision in the South Dakota v. Wayfair case opened the door for states to broaden the reach of their sales tax net.

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What Consumer Use Tax Looks Like Post-Wayfair

This article was originally published on AccountingWeb, 10/30/2018.

As the impact of the Supreme Court’s case on Wayfair Inc. continues to play out, some commentary has focused on different aspects of the decision including the fact that in all sales tax states, long-standing laws already compel consumers who make tax-free purchases to self-remit the taxes due.

These self-remit rules are referred to as “consumer’s use tax.” Although the consumer’s use tax rules focus on a purchaser’s duty to self-remit use taxes where no sales taxes are collected, it should be noted that, in some states, a seller may be obligated to collect “seller’s use taxes” on behalf of their purchasers.

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Is Real-Time Sales Tax Collection Possible?

With the Wayfair ruling expanding sales tax collection obligations, your clients with customers in multiple states are exploring the viability of automated sales tax and other indirect tax calculation solutions.

Finding a way to streamline collections is key, as no one wants to keep up with this manually any longer. Automation is also key – the advanced capabilities of automated sales tax compliance tools were even mentioned by the U.S. Supreme Court in Wayfair as a mitigating factor in favor of the Court’s rollback of the somewhat vendor-friendly physical presence standard.

The mash-up of geo-locating capabilities, real-time cloud-based calculations, instantaneous applications of current rates,

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U.S. Supreme Court Overturns Quill, Opens Door for States to Require Sales Tax Collection by Virtually All Remote Sellers

In a momentous decision that is likely to have far-reaching effects on retail commerce, the Supreme Court ruled 5-4 that states may require remote sellers (those without any physical presence) to collect and remit sales tax on sales to in-state residents and businesses.

Although the Court’s choice to overturn 51 years of precedent was not altogether unexpected, it will nonetheless require businesses that sell on a multistate basis to make some impactful and immediate decisions on how to operate in the post-Quill world.

A few thoughts on the Court’s June 21, 2018 decision in South Dakota v.

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