Wayfair Sales Tax Nexus: Mutiple States Go Live Today

Multiple states are initiating their remote sales tax filing requirements today.As a result of the United States Supreme Court’s June 21 decision inSouth Dakota v. Wayfair,states have been seeking to either craft or revise their present sales tax nexus laws to meet the standards as set forth by the state of South Dakota. The Court’s ruling eliminated the prior physical presence threshold requirements underQuill Corp. v. North Dakotaas to when states could tax remote sales.

The majority of states are mirroring South Dakota’s economic nexus law, which established as a bright line sales tax nexus on vendors with more than $100,000 in sales or more than 200 transactions a year.

Going forward, as of the publication of this article, additional states are implementing their own Wayfair nexus, due at this time on Nov. 1 (New Jersey, North Carolina, South Carolina, South Dakota; two more on December 1 (Connecticut and Colorado), and additionally on January 1, 2019 (Georgia, Iowa, Louisiana, Nebraska, Utah). Other states are still the process of drafting their legislation (e.g., Arizona and California) , or alternatively have yet to explore their options or release any news as to their treatment ofWayfair(e.g. Kansas and West Virginia).

Updated December 5, 2018

Additional states have passed economic nexus requirements.Effective on and after January 1, 2019, remote sellers who make retail sales of tangible personal property, and/or services for delivery to Utah or West Virginia may be required to collect and remit sales tax if either of the following conditions are met:

• The remote seller has gross revenue of greater than $100,000 from retail sales of tangible personal property, and/or services for delivery in the state; or
• The remote seller’s transactions from these specified activities amount in 200 or more separate transactions in the state.

Sellers who meet the above criteria should register for a Utah or West Virginia sales tax license which can be done online through each state’s webpage. Sellers who fall below both thresholds are not required to file. Once either of these thresholds are surpassed, a seller must register, and begin collecting and remitting sales tax in each applicable state.

October 1, 2018 Wayfair Sales Tax Nexus State Threshold

• Alabama – $250,000 in sales ; note: no transaction threshold
• Illinois – $100,000 in sales or 200 or more transactions
• Indiana – $100,000 in sales or 200 or more transactions
• Kentucky – $100,000 in sales or 200 or more transactions
• Maryland – $100,000 in sales or 200 or more transactions
• Michigan – $100,000 in sales or 200 or more transactions
• Minnesota – $100,000 in 10 transactions or 100 total transactions
• North Dakota – $100,000 in sales or 200 or more transactions
• Washington – Either $100,000 in sales or 200 or more transactions; alternatively businesses with sales between $10,000 and $100,000 and less than 200 transactions must comply with Washington’s Notice and Information Reporting requirements
• Wisconsin – $100,000 in sales or 200 or more transactions

Note the following states already enforcingWayfair-based economic sales tax nexus, and/or associated sales tax notice and reporting requirements:

• Hawaii – $100,000 in sales or 200 or more transactions (effective as of 7/1/2018)
• Maine- $100,000 in sales or 200 or more transactions (effective as of 7/1/2018)
• Massachusetts – $500,000 and 100 transactions, retroactively applied as of original effective date of 10/1/17
• Mississippi $250,000 in sales ; note: no transaction threshold (effective as of 9/1/18)
• Ohio – $500,000 in sales ; note: no transaction threshold (retroactive effective as of 6/30/17)
• Oklahoma – $10,000 (no transaction threshold) instituting either compliance with notice and information reporting requirements OR collecting and remitting sales tax as of 7/1/18
• Pennsylvania – $10,000 (no transaction threshold) instituting either compliance with notice and information reporting requirements OR collecting and remitting sales tax as of 3/1/18
• Rhode Island – $100,000 in sales or 200 or more transactions instituting either compliance with notice and information reporting requirements OR collecting and remitting sales tax (effective as of 6/21/2018)
• Vermont – $100,000 in sales or 200 or more transactions (effective as of 7/1/2018)