2018-07-13 14:34:10NewsEnglishA complete list of which states have enacted state tax nexus laws based on the Supreme Court ruling in the South Dakota v. Wayfair case.https://quickbooks.intuit.com/r/us_qrc/uploads/2018/07/Supreme-Court-Tax-Decision-–-Online-Tax-Laws-By-State_Gopi_featured.jpgSupreme Court Tax Decision - Online Tax Laws By State

Supreme Court Tax Decision – Online Tax Laws By State

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Tax Laws by state following the Wayfair decision – updated 7/11/18

A B D E I J P Q W X Y Z

On June 21, 2018, the United States Supreme Court issued the much-anticipated decision in the case of South Dakota v. Wayfair, in favor of South Dakota. In this case, the Court ruled in favor of a South Dakota law that requires any out-of-state seller that delivers more than $100,000 of goods or services or has 200 or more transactions in South Dakota, on an annual basis, to collect sales tax from purchasers located in the state. This ruling overturned the long-standing physical presence rule set out in Quill Corp. v. North Dakota and set the foundation for all other states to enact similar laws if they don’t already have them.

What are the next steps by the states?

This is the biggest question that our researchers are tracking. Currently, in addition to South Dakota, a number of other states either have already exacted economic nexus laws or have court cases or legislation pending, all which were waiting on the outcome of the Wayfair case. Below is a current compilation of those laws.

Alabama

The Alabama Department of Revenue issued Rule 810-6-2-.90.03 instituting an economic nexus policy for the state with an original effective date of January 1, 2016. Since the Wayfair decision, the effective date has been pushed out. Rule 810-6-2-.90.03 explains when out-of-state sellers who lack an Alabama physical presence but who are making retail sales of tangible personal property into the state have a substantial economic presence in Alabama for sales and use taxes.

Threshold: $250,000 in sales per year, based on the previous year

Effective date: October 1, 2018

Guidance: https://revenue.alabama.gov/2018/07/03/ador-announces-sales-and-use-tax-guidance-for-online-sellers/

Alaska

Alaska does not currently have a remote seller or economic nexus law in place or pending. Alaska does not impose a statewide sales or use tax, although local jurisdictions are allowed to impose a sales or use tax.

Arizona

Arizona does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have been discussing the possibility of introducing a bill but the next session won’t begin until January 2019.

Arkansas

Arkansas does not currently have a remote seller or economic nexus law in place or pending. As of July 1, 2018, the state has not published any guidance indicating it intends to enact future legislation.

California

California does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have been discussing the possibility of introducing a bill in the near future.

Colorado

Colorado passed HB 10-1193 in 2010, which established notice and reporting requirements for retailers that make sales into Colorado but do not collect Colorado state sales tax. Enforcement of the requirements began on July 1, 2017.

Threshold: A non-collecting retailer with more than $100,000 in sales in Colorado is required to provide its customers who made more than $500 in purchases over the calendar year with an “Annual Purchase Summary.”

Effective Date: July 1, 2017

Guidance: https://www.colorado.gov/pacific/tax/use-tax-information-non-collecting-retailers

Connecticut

Connecticut passed a remote seller law containing economic, marketplace and notice and reporting requirement provisions, effective December 1, 2018. Retailers and marketplace facilitators meeting both of the prerequisites under the law must begin collecting and remitting Connecticut sales and use tax on the effective day.

Threshold: The Connecticut law requires retailers and marketplace facilitators with gross receipts of at least $250,000 and 200 or more retail sales in Connecticut during the 12-month period ending on September 30 immediately preceding the monthly or quarterly period with respect to which such person’s liability for tax under the law is determined.

Effective Date: December 1, 2018

Guidance: http://www.ct.gov/drs/cwp/view.asp?q=603004; https://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=SB00417&which_year=2018

Delaware

Delaware does not currently have a remote seller or economic nexus law in place or pending. Delaware does not impose a statewide sales or use tax.

Florida

Florida does not currently have a remote seller or economic nexus law in place or pending. Florida legislators, along with the Governor, are discussing moving forward with a bill. TaxWatch reports that Florida relies on sales tax revenue more than any other state, except Tennessee. The Florida Retail Federation published a statement saying the South Dakota v. Wayfair decision levels the playing field between brick-and-mortar retailers and online sellers and expressed their support for a similar law to be enacted in Florida.

Georgia

Georgia passed HB 61, a remote seller law containing economic nexus and reporting requirements. Georgia had previously enacted Click-Through and Affiliate Nexus in 2012.

Threshold: The Georgia law requires sellers who have gross revenue exceeding $250,000 in the previous or current calendar year or 200 or more sales of tangible personal property delivered electronically or physically in Georgia in the previous or current calendar year.

Effective Date: January 1, 2019

Guidance: http://www.legis.ga.gov/legislation/en-US/Display/20172018/HB/61

Hawaii

Hawaii passed a remote seller law whereby a taxpayer will be required to maintain a General Excise Tax (GET) license, file GET returns, and remit GET to the State if certain requirements are met.

Hawaii will allow qualifying taxpayers to report and pay general excise tax on their “catchup income” without penalty or interest. “Catchup income” is income recognized before July 1, 2018, for the tax year beginning between January 1, 2018, and June 30, 2018.

A qualifying taxpayer is one who:

  • did not have a general excise tax license as of June 12, 2018, the date Act 41 was signed;
  • lacks physical presence in Hawaii as of June 12, 2018;
  • meets the $100,000 or 200-transaction threshold for 2017 or 2018; and
  • has a tax year beginning between January 1, 2018, and June 30, 2018.

Threshold: Gross income of $100,000 or more in the current or preceding calendar year; or 200 or more separate transactions in the state.

Effective Date: July 1, 2018; applicable to taxable years beginning after 2017

Guidance: http://files.hawaii.gov/tax/news/announce/ann18-10.pdf

Idaho

The Tax Commission implemented a new law, House Bill 578, which requires out-of-state retailers to collect Idaho sales tax on their sales to Idaho customers.

Threshold: Total sales to Idaho buyers exceeds $10,000 in the previous year

Effective date: July 1, 2018

Guidance: https://tax.idaho.gov/n-feed.cfm?idd=4190

Illinois

The Governor signed Illinois’ Budget Implementation Bill, HB 3342, last month, which included a law that parallels the language of the South Dakota remote seller law.

Threshold: $100,000 in annual sales or 200 transactions in a 12 month period

Effective Date: October 1, 2018

Guidance: The bill is now Public Act 100-0587, page 472: http://www.ilga.gov/legislation/publicacts/100/PDF/100-0587.pdf.

Indiana

Indiana law (IC 6-2.5-2-1(c)) requires a seller without a physical location in Indiana to obtain a registered retail merchant’s certificate, collect and remit applicable sales tax if the seller meets either or both of the following thresholds.

Threshold: Gross revenue from sales into Indiana exceeding $100,000 or 200 or more separate transactions into Indiana.

Effective date: July 1, 2017, but remote sellers are not obligated to collect until ongoing court case is resolved. DOR will provide specific date for enforcement as soon as it is known

Guidance: https://www.in.gov/dor/6367.htm

Iowa

The Iowa Governor signed a bill, Senate File 2417, that parallels the language of the South Dakota remote seller law. In addition, this bill also introduces sales tax to “specified digital products” such as electronically transferred digital audio visual works, digital audio works, digital books, and other digital products including all music, movies, ringtones, apps, greeting cards, games, news, and the like.

Threshold: $100,000 in annual sales or 200 transactions in previous or current calendar year

Effective Date: January 1, 2019

Guidance: A summary of the law can be found on page 180 of the 2018 Summary of Legislation: https://www.legis.iowa.gov/docs/publications/SOL/967604.pdf#SF2417; https://tax.iowa.gov/south-dakota-v-wayfair

Kansas

Kansas does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have been discussing the possibility of introducing a bill in the near future.

Kentucky

The Kentucky Legislature overrode their Governor’s veto to enact a tax bill containing economic nexus provisions. The legislation included a law that parallels the language of the South Dakota remote seller law, which requires remote online sellers to start collecting sales tax on transactions made into the state.

Threshold: $100,000 in annual sales or 200 transactions in the previous or current calendar year

Effective Date: July 1, 2018

Guidance: https://revenue.ky.gov/News/Pages/Sales-and-Use-Tax-Collections-by-Remote-Retailers-U.S.-Supreme-Court-Ruling.aspx

Louisiana

Louisiana has enacted an economic nexus law that states that effective for the taxable period beginning on or after the date of the final ruling in Wayfair, remote retailers of property, products transferred electronically, or services must collect and remit Louisiana sales tax if the appropriate thresholds are met.

Thresholds: Gross revenue from Louisiana sales exceeds $100,000; or 200 or more separate transactions of products or services were delivered into Louisiana.

Effective Date: July 1, 2018

Guidance: https://www.legis.la.gov/Legis/ViewDocument.aspx?d=1104153

Maine

Maine enacted a bill requiring remote sellers to collect and remit sales and use tax on sales into Maine and to provide retailers a collection allowance (2%).

Threshold: $100,000 in annual sales or 200 transactions in the previous or current calendar year

Effective Date: October 1, 2017; no retroactive application of tax.

Guidance: https://legislature.maine.gov/legis/bills/bills_128th/billtexts/SP048301.asp

Maryland

Maryland does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have been discussing the possibility of introducing a bill in the near future.

Massachusetts

Massachusetts implemented 830 CMR 64H.1.7 (Vendors Making Internet Sales) in October 2017. The regulation continues to apply and has not been impacted by the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. The purpose of 830 CMR 64H.1.7 is to explain how the general sales and use tax jurisdictional standard set forth in M.G.L. Chs. 64H and 64I applies to vendors making Internet sales, taking into consideration the relevant provisions of the U.S. constitution and federal law.

Threshold: $500,000 in sales from transactions completed over the preceding calendar year and sales resulting in a delivery into Massachusetts in 100 or more transactions in the preceding calendar year.

Effective Date: October 1, 2017

Guidance: https://www.mass.gov/regulations/830-CMR-64h17-vendors-making-internet-sales

Michigan

Michigan does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have discussed the possibility of introducing a bill in the future, but nothing has been drafted as of now.

Minnesota

Minnesota enacted a marketplace provider’s law in 2017. It requires an out-of-state retailer or their marketplace provider to collect and remit tax when the marketplace provider has a physical presence in Minnesota, unless sellers on the marketplace site are already collecting the tax.

Threshold: 100 transactions or $100,000 sales in at least 10 transactions over a 12 month period

Effective Date: June 21, 2018; more guidance will be provided by the DOR

Guidance: http://www.revenue.state.mn.us/businesses/sut/Pages/Marketplace-Providers-Online-Retailers.aspx

Mississippi

Mississippi has enacted a remote seller law whereby out-of-state sellers who lack physical presence in Mississippi must collect sales and use tax on sales to Mississippi residents.

Threshold: Sales greater than $250,000 for the prior 12- month period.

Effective Date: December 1, 2017

Guidance: http://www.dor.ms.gov/Press%20Releases/Wayfair%20NEW.pdf

Missouri

Missouri does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have discussed the possibility of introducing a bill in the future, but nothing has been drafted as of now.

Montana

While there is no sales tax in Montana, politicians in the state are concerned that residents, who are remote sellers in other states, will now be required to collect sales tax in states where they are deemed to have an economic presence. U.S. Senator Jon Tester introduced the Stop Taxing Our Potential (STOP) Act to overturn the U.S. Supreme Court’s decision from in South Dakota v. Wayfair.

Guidance: https://www.congress.gov/bill/115th-congress/senate-bill/3180/text

Nebraska

Nebraska does not currently have a remote seller or economic nexus law in place, but the legislature had been considering a notice and reporting structure during the 2018 session. As of April 2018, the issue has been indefinitely postponed.

Nevada

Nevada does not currently have a remote seller or economic nexus law in place or pending. The Taxation Director has reported that they have been discussing the possibility of introducing a new regulation which would allow the state to start collecting sales tax from remote sellers.

New Hampshire

While there is no sales tax in New Hampshire, politicians in the state are concerned that residents, who are remote sellers in other states, will now be required to collect sales tax in states where they are deemed to have an economic presence. U.S. Senator Jon Tester introduced the Stop Taxing Our Potential (STOP) Act to overturn the U.S. Supreme Court’s decision from in South Dakota v. Wayfair.

Guidance: https://www.congress.gov/bill/115th-congress/senate-bill/3180/text

New Jersey

New Jersey lawmakers quickly introduced Senate Bill 2794 and Assembly Bill 4261, calling for an economic nexus law that parallels the language of the South Dakota remote seller law, which requires remote online sellers to start collecting sales tax on transactions made into the state. The bill, collectively now A-4261 has been passed by both houses and is awaiting the Governor’s signature as of July 3, 2018. Upon being signed, the effective date would be the first day of the first month of the first calendar quarter beginning at least 90 days after the date of enactment.

This bill also includes sales tax collection and reporting requirements on a “marketplace facilitator,” which is defined to mean any person or business who provides a forum to a retailer to advertise, promote and list the retailer’s products and who also collects receipts from the customer and remits payment to the retailer.

Threshold: $100,000 in annual sales or 200 transactions

Effective Date: Pending (Awaiting Governor’s signature)

Guidance: http://www.njleg.state.nj.us/2018/Bills/S3000/2794_I1.HTM and https://legiscan.com/NJ/bill/A4261/2018

New Mexico

New Mexico does not currently have a remote seller or economic nexus law in place, but the legislature had been considering a notice and reporting structure during the 2017 session. As of 2018, the issue has been indefinitely postponed.

New York

New York does not currently have a remote seller or economic nexus law in place or pending. The New York Department of Finance has commented that they are currently reviewing the South Dakota v. Wayfair decision.

North Carolina

North Carolina does not currently have a remote seller or economic nexus law in place, but the legislature had been considering a notice and reporting structure during the 2017 session. As of 2018, the issue has been indefinitely postponed.

North Dakota

North Dakota passed a remote seller law that mirrors the litigated South Dakota law. Once Quill v. North Dakota was overturned, North Dakota law required remote sellers to collect North Dakota sales and use tax on their sales into the state unless those sellers did not meet the following threshold.

Threshold: Sales exceeding $100,000 or 200 transactions in the previous or current calendar year

Effective Date: October 1, 2018, or 60 days after taxpayer meets the threshold, whichever is later

Guidance: https://www.nd.gov/tax/remoteseller

Ohio

There is currently litigation in Ohio pertaining to a remote seller law that became effective this past year, which relies on physical nexus related to in-state software on phones and servers located in Ohio. This is also termed “software nexus.” The is being challenged by the ACMA, American Catalog Mailers Association, and the South Dakota v. Wayfair decision does not have an immediate impact the current lawsuit.

Threshold: $500,000 of goods sold into state and in-state software on computers and phones, or have servers located in Ohio

Effective Date: January 1, 2018

Guidance: House Bill 49, Ohio FY 2018 Budget Bill, http://src.bna.com/qFB, https://www.tax.ohio.gov/Portals/0/sales_and_use/nexususetaxst2017-02-2017.pdf

Oklahoma

The state has enacted legislation, HB1019, offering out-of-state retailers the option of collecting and remitting sales tax in Oklahoma or providing the state with a list of its Oklahoma customer’s names, dates of purchase and sales totals.

Threshold: Sales exceeding $10,000 in the preceding 12 month calendar period

Effective Date: July 1, 2018

Guidance: http://webserver1.lsb.state.ok.us/cf_pdf/2017-18%20ENR/hB/HB1019XX%20ENR.PDF

Oregon

Oregon does not currently have a remote seller or economic nexus law in place or pending. Oregon does not impose a statewide sales or use tax.

Pennsylvania

Pennsylvania has enacted notice and reporting requirements for remote sellers. A remote seller is a seller that does not maintain a place of business in Pennsylvania and makes sales directly to individual and business customers in Pennsylvania.

Threshold: Sales of $10,000 or more in the previous 12-month period

Effective Date: April 1, 2018

Guidance: http://www.revenue.pa.gov/GeneralTaxInformation/Tax%20Types%20and%20Information/SUT/MarketPlaceSales/Pages/Remote-Sellers.aspx

Rhode Island

Rhode Island has passed a remote seller law containing economic, marketplace and notice and reporting requirement provisions, effective August 17, 2017. Under the legislation, a “non-collecting retailer” – such as an out-of-state retailer that sells taxable goods or services via its website – must register with the Rhode Island Division of Taxation and collect and remit Rhode Island sales and use tax.

Threshold: $100,000 in sales or 200 or more transactions in Rhode Island in a calendar year. Non-collecting retailers can also give notice to buyers about their sales tax obligation instead of collecting

Effective Date: August 17, 2017

Guidance: http://www.tax.ri.gov/Non-collecting%20retailers/index.php

South Carolina

South Carolina does not currently have a remote seller or economic nexus law in place or pending. State lawmakers believe the Legislature will wait until the next regular session, which is next year, to adjust the tax code to add an economic nexus law similar to South Dakota.

South Dakota

The remote seller/economic nexus law in South Dakota is considered to be the model law. The law was tested in state court and ultimate upheld as valid by the U.S. Supreme Court.

Threshold: Sales of $100,000 or 200 transactions in the state in a calendar year

Effective Date: The US Supreme Court case was decided on June 21, 2018, but for other reasons, the case was remanded and a State Circuit Court injunction still remains in place, so not effective date can be set until that injunction is lifted.

Guidance: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

Tennessee

Tennessee enacted Rule 1320-05-01-.129 dealing with out-of-state dealers in 2017.

Threshold: Dealers who meet the $500,000 threshold after March 1, 2017, shall register with the Department and begin to collect and remit Tennessee sales and use tax by the first day of the third calendar month following the month in which the dealer met the threshold. In no case, however, shall such dealers be required to collect and remit sales and use taxes to the Department for periods before July 1, 2017

Effective Date: The rule has not been enforced pending the outcome in South Dakota v. Wayfair, Inc., as well as a State Court lawsuit challenging the regulation.

Guidance: https://publications.tnsosfiles.com/rules/1320/1320-05/1320-05-01.20170101.pdf

https://www.tn.gov/content/dam/tn/revenue/documents/notices/sales/sales17-12.pdf

Texas

Texas does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have been discussing the possibility of introducing legislation and rule amendments when the Legislature reconvenes in 2019.

Effective date: Early 2019 is the target effective date for rule amendments

Guidance: https://comptroller.texas.gov/about/media-center/news/2018/180627-wayfair.php

Utah

Utah does not currently have a remote seller or economic nexus law in place or pending. State lawmakers believe the Legislature will wait until the next regular session, which is next year, to adjust the tax code to add an economic nexus law similar to South Dakota.

Vermont

In 2016, the state passed Act 134 which included an economic nexus law that parallels the language of the South Dakota remote seller law. This law has been codified under 32 V.S.A. §9701(9)(F),(G) and requires certain out-of-state vendors to collect and remit sales tax, effective on the first day of the first quarter after there is no longer a physical presence rule.

Threshold: $100,000 or 200 individual transactions during any preceding twelve-month period.

Effective Date: July 1, 2018

Guidance: http://tax.vermont.gov/business-and-corp/sales-and-use-tax/sales-and-use/wayfair; https://legislature.vermont.gov/assets/Documents/2016/Docs/ACTS/ACT134/ACT134%20As%20Enacted.pdf

Virginia

Virginia does not currently have a remote seller or economic nexus law in place or pending. State lawmakers have discussed the possibility of introducing a bill in the future, but nothing has been drafted as of now.

Washington

Washington has passed a remote seller law containing economic, marketplace and notice and reporting requirement provisions. Washington’s rules apply to marketplace facilitators, marketplace sellers, remote sellers, and referrers.

Threshold: $10,000 or more in retail sales to Washington purchasers

Effective Date: January 1, 2018

Guidance: https://dor.wa.gov/find-taxes-rates/retail-sales-tax/marketplace-fairness-leveling-playing-field

West Virginia

West Virginia does not currently have a remote seller or economic nexus law in place or pending. Lawmakers have discussed introducing legislation but the Governor has expressed he does not want to burden residents with additional taxes at this time.

Wisconsin

Beginning October 1, 2018, Wisconsin will require remote sellers to collect and remit sales or use tax on sales of taxable products and services in Wisconsin. New standards for administering sales tax laws on remote sellers will be developed by rule. The rule will be consistent with the Court’s decision in Wayfair, which approved a small seller exception for sellers who do not meet the threshold below.

Threshold: Sales of $100,000 or 200 transactions in the state in a calendar year

Effective Date: October 1, 2018

Guidance: https://www.revenue.wi.gov/Pages/Businesses/remote-sellers.aspx

Wyoming

In 2017, the Wyoming Governor signed legislation instituting an economic nexus law that parallels the language of the South Dakota remote seller law, requiring remote online sellers to start collecting sales tax on transactions made into the state starting July 1, 2017. The law was quickly contested and the provisions were not enforced, awaiting the legal issues to be resolved.

Threshold: $100,000 in annual sales or 200 transactions in the state in the previous calendar year.

Effective Date: July 1, 2017; an enforcement date will be released by the DOR upon review of Wayfair.

Guidance: https://sites.google.com/a/wyo.gov/wy-dor/Noticeofcollectionauthority.pdf

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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