Source: https://quickbooks.intuit.com/r/news/supreme-court-tax-decision-online-tax-laws-by-state/
Timestamp: 2019-04-26 00:21:02+00:00

Document:
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.
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.
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 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 is set to address remote seller legislation when the next General Assembly session begins on January 14th. H.B. 1002 provides for nexus requirements that parallel the South Dakota remote seller law, which requires remote online sellers to start collecting sales tax on transactions made into the jurisdiction. The law would become effective on the first day of the calendar quarter following the effective date of the act.
California has enacted new use tax collection requirements for out-of-state retailers. Vendors with more than $100,000 in annual sales of tangible personal property and services or 200 transactions into California are required to collect and remit tax beginning April 1, 2019. The new use tax collection requirement is not retroactive.
In light of Wayfair, the state of Colorado will begin collecting state sales tax and state-collected local and special district sales tax from out-of-state retailers. Out-of-state retailers are defined as retailers that do not have a physical presence in Colorado. Out-of-state retailers must get a state of Colorado Sales Tax license in order to collect and remit sales tax.
HB1240 has been introduced into the Colorado General Assembly. The bill seeks to codify remote seller collection schemes into law by requiring remote sellers and marketplace facilitators with annual sales in excess of $100,000 to collect and remit sales tax. The bill also codifies the Department of Revenue’s sourcing rule for state sales tax collection.
Effective Date: December 1, 2018, with a grace period that has been extended to May 31, 2019 (https://www.colorado.gov/pacific/tax/sales-tax-changes-grace-period-and-key-facts).
HB1240 is effective June 1, 2019 if passed.
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.
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.
The District of Columbia has enacted its remote seller legislation, B22-0914. The nexus requirements parallel the language of the South Dakota remote seller law, which requires remote online sellers to start collecting sales tax on transactions made into the jurisdiction. The law made permanent emergency legislation that was effective January 1, 2019. The provisions of the bill will not be enforced retroactively.
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.
Intangible property used in Hawaii.
To avoid any constitutional concerns, the Department will not retroactively administer these requirements. Accordingly, taxpayers who lacked physical presence in Hawaii prior to July 1, 2018, but who met the $100,000 or 200-transaction threshold in 2017 or 2018, will not be required to remit GET for the period from January 1, 2018 to 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.
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.
This past June, the Governor signed Illinois’ Budget Implementation Bill, HB 3342, which included a law that parallels the language of the South Dakota remote seller law. This bill was enacted into law as Illinois Public Act (P.A.) 100-587. The Illinois Department of Revenue has recently posted guidance for remote sellers making sales to Illinois purchasers.
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.
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.
A bill has been introduced in Kansas that contains remote seller requirements. HB 2349 would require any remote seller that had sales to Kansas customers in the preceding calendar year to register and collect sales tax.
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. The nexus standards adopted in HB 487 are effective July 1, 2018 and registrations should be completed with sales and use tax collections beginning by October 1, 2018.
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.
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%).
Maryland has enacted emergency rules in the state regarding remote sales. Vendors with more than $100,000 in annual sales of tangible personal property and services or 200 transactions into Maryland are required to collect and remit tax beginning October 1, 2018. This emergency ruling will remain in effect until March 30, 2019 when a permanent regulation is approved.
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.
Michigan released Revenue Administrative Bulletin 2018-16 on August 1, 2018, addressing the state’s economic nexus standards in light of the US Supreme Court’s Wayfair decision.
Effective October 1, 2018, remote sellers meeting the threshold in the previous calendar year are required to remit sales or use tax. The threshold includes taxable and non-taxable sales. Sellers meeting this economic presence nexus test are liable to remit tax until a calendar year passes in which the seller does not meet one of the thresholds above.
Remote sellers are urged to review their 2017 calendar year sales (January 1, 2017 to December 31, 2017) to determine if they have exceeded the economic nexus thresholds. If one of the thresholds has been met, sales into Michigan must be reported and tax remitted from October 1, 2018 forward.
The Minnesota Department of Revenue will require remote sellers and Marketplace Providers facilitating sales into Minnesota to begin collecting sales tax no later than October 1, 2018. Minnesota law also requires certain Marketplace Providers to collect and remit Minnesota sales tax on all taxable retail sales made into Minnesota facilitated by the marketplace.
Threshold: Minnesota has a Small Seller Exception, which does not require remote sellers to collect sales tax until their sales during a period of 12 consecutive months total either 100 or more retail sales shipped to Minnesota or 10 or more retail sales shipped to Minnesota that total more than $100,000.
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. Mississippi was not enforcing the rule prior to the decision in South Dakota v. Wayfair, Inc. Now, the Department of Revenue will allow online sellers to begin collection of Mississippi use tax for sales made on or after September 1, 2018, when such sellers register to collect Mississippi tax by August 31, 2018.
Threshold: Sales greater than $250,000 for the prior 12-month period.
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.
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.
In Nebraska, remote sellers – retailers who do not have a physical presence in Nebraska, but make sales to purchasers in Nebraska – who engage in business in Nebraska are required to obtain a sales tax permit and begin collecting and remitting sales tax effective January 1, 2019.
A remote seller bill, NB Legislative Bill 18, has been introduced in the 2019 Nebraska legislative session. The nexus requirements parallel the language of the South Dakota remote seller law, which requires remote online sellers to start collecting sales tax on transactions made into the jurisdiction. The bill currently carries an effective date of October 1, 2019.
The Department of Revenue also states it will not pursue retroactive sales tax collection from remote sellers that did not have physical presence in Nebraska for sales made to customers in Nebraska prior to January 1, 2019.
The Nevada State Tax Commission unanimously decided to implement a regulation 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 Nevada Legislative Commission provided the required final approval for the Nevada Department of Taxation’s regulation, which will now go into effect October 1, 2018.
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.
The Governor of New Jersey signed into law A4496, 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. This law 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.
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.
The New York Department of Taxation and Finance has stated that their existing provisions for remote vendors are in effect in wake of the Wayfair decision. Remote vendors with more than $300,000 in sales of tangible personal property into New York and more than 100 transactions must collect and remit state and local sales taxes. Vendors with no physical presence in the state that meet both thresholds in the preceding four sales tax quarters are required to register with the state tax department immediately and begin collecting and remitting sales tax.
The North Carolina Department of Revenue issued a directive requiring certain sellers not physically located in North Carolina to collect and remit sales tax on sales sourced to North Carolina. The NCDOR will enforce the North Carolina statute concerning remote sales with regard to remote sellers having gross sales sourced to the state in excess of $100,000 or having 200 or more separate transactions sourced to the state in the previous or current calendar year.
North Dakota initially passed a remote seller law that mirrored the litigated South Dakota law. Once Quill v. North Dakota was overturned, the 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 $100,00 in annual sales or 200 transaction threshold. ND S.B. 2191 was signed into law on March 14th 2019. This new law eliminates the 200 transaction requirement from the threshold. The new threshold law went into effective for tax years starting after December 31, 2018.
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.
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.
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 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.
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.
The South Carolina Department of Revenue has released Revenue Ruling 18-14 providing guidance to remote sellers with sales into the state. Remote sellers whose gross revenue from sales of tangible personal property, products transferred electronically, and services delivered into South Carolina exceed $100,000 in the previous or current calendar year are required to collect and remit tax to the state.
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. On September 12, 2018, the Governor of South Dakota signed Senate Bill 1 into law, removing the imposition of an injunction against the collection of sales tax on remote sales in South Dakota. The law is effective November 1, 2018. At this point South Dakota will enforce sales tax collections from those who meet the threshold below.
Tennessee enacted Rule 1320-05-01-.129 dealing with out-of-state dealers in 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.
Texas does not currently have a remote seller or economic nexus law in place or pending. Texas Comptroller Glenn Hegar issued initial guidance in the wake of the Wayfair decision. The state issued an economic nexus Draft Regulation in September and initiated a 30-day comment period.
Legislature passed H.B. 2002/S.B. 2001 which was signed by the Governor on July 21, 2018. This bill provides for an economic nexus law that parallels the language of the South Dakota remote seller law, requiring certain out-of-state vendors to collect and remit sales tax.
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.
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 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.
Beginning January 1, 2019, remote sellers will be required to collect West Virginia State and municipal sales and use taxes on sales delivered in West Virginia, unless a small seller exception applies. The state released Administrative Notice 2018-18 which outlines an economic nexus law that parallels the language of the South Dakota remote seller law.
Beginning October 1, 2018, Wisconsin will require out-of-state sellers with no physical presence in Wisconsin (remote sellers) to collect and remit Wisconsin sales or use tax on sales of taxable products and services in Wisconsin. New standards for administering Wisconsin sales tax laws on remote sellers will be developed by rule. The rule will be consistent with the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., which approved a small seller exception for sellers who do not have annual sales of products and services into the state of (1) more than $100,000, or (2) 200 or more separate transactions. Any small seller exception adopted will not apply to sellers with a physical presence in Wisconsin.
Wyoming has released the effective date of their 2017 economic nexus law. Beginning February 1, 2019, remote sellers will be required to collect Wyoming State and municipal sales and use taxes on sales delivered in Wyoming, unless a small seller exception applies. The state released two Remote Sellers Bulletins which outline an economic nexus law that parallels the language of the South Dakota remote seller law.
What does the Supreme Court Internet Sales Tax Ruling Mean for My Business?

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