South Dakota v. Wayfair
On June 21, 2018, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states can mandate that businesses without a physical presence in a state with more than 200 transactions or $100,000 in-state sales collect and remit sales taxes on transactions in the state. This decision overturned the Court’s 1992 decision in Quill v. North Dakota and 1967 decision in National Bellas Hess. Since the decision was handed down by the Court, states and retailers alike have been asking “What’s next?”
- It is not retroactive, meaning South Dakota can’t look back and require collection and remittance of sales and use tax on previously purchased items.
- Only merchants who have considerable amount of business are required to collect (according to the South Dakota law in question that means $100,000 in in-state sales or over 200 orders in the state).
- South Dakota is one of 20 states that have adopted the Streamlined Sales and Use Tax Agreement, which provides certain standardization within the sales and use tax statutes “to reduce administrative and compliance costs” for remote sellers.
Featured AICPA Resources
Charts, maps, and guides
- State notices and resources for remote sellers
- State guides and remote seller nexus rules chart
- Remote seller nexus chart, economic nexus state guide, FAQs
- Remote seller nexus by state (map, thresholds chart, next steps) and state by state guide to sales tax nexus rules
- States follow South Dakota: a by-state guide on economic nexus
- Remote sales tax collection (NCSL – overview, state action, legislation, marketplace collection, SSUTA, revenue, nexus, and map)