Sales and Use Tax Compliance in 2019 = A Happier New Year
Mapping the sales and use tax compliance maze
The year 2018 was a banner year for major law and administrative changes in sales and use tax compliance. In addition to the numerous changes in sales and use tax rates, rules and holidays, the Supreme Court on June 21, 2018, in Wayfair v South Dakota, changed the game in sales and use tax compliance in a major way. This monumental ruling expanded the reach (so-called nexus) of states to impose sales and use tax collection and remittance obligations on all retailers.
Online retailers particularly effected
In particular, this ruling had a pronounced effect on those retailers that sell online, so-called remote sellers. Where once physical presence in a state was the only way that a retail business could be subject to the sales and use tax jurisdiction of the states, now “mere” economic presence is also enough to impose such liability on businesses. This is called economic nexus.
More states are conforming in 2019
Many states have already enacted these economic nexus laws, and it is expected that by the end of 2019 all states will have such laws. This means that businesses in 2019 will feel the full impact of the Wayfair decision. In turn, this will present major challenges for businesses to stay sales and use tax compliant, not just in states where they have physical presence, as in the past, but now where they have economic presence—states in which businesses meet certain minimum threshold amounts in both amount of sales and/or number of transactions.
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