Economic Nexus: Post-Wayfair
Remote sellers (out of state via Internet, mail order or telephone without a physical presence in that state) face greater sales tax challenges after the June 21, 2018, U.S. Supreme Court decision for South Dakota v. Wayfair which expands the scope of economic nexus. The landmark decision overturns the previous nexus ruling of physical presence established by Quill v. North Dakota in 1992. In short, if your company sells in other states without having a physical presence, you may have to register to avoid penalty and interest.
States establish their own sales thresholds (volume and transactions) for companies to meet, as well as dates by which the decision takes effect. As such, it is important for those affected to understand what this decision means for their business and why a proactive approach for state registration can safeguard against future exposures.
For additional detail, click here – Economic Nexus Clarified.
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