One Year After Wayfair

After The Landmark Decision

One year after the landmark decision in the South Dakota v Wayfair case, nonprofits are struggling to understand where obligations lie and the timeline to address them.

When a remote seller surpasses a state’s threshold (e.g., $100,000 in gross receipts), the seller has an obligation to collect and remit sales tax in the state.  It took just 11 months for this tax policy to spread nationwide.

Challenges

One of the challenges for the states is enforcing new economic nexus provisions.  A grey area is the timing when nexus is created and what’s included from economic nexus threshold calculations. 

Challenges are not only faced by U.S. based businesses, but international non-U.S. businesses.  The question is whether states are able to enforce collection against non-U.S. entities.

States Ask For More Clarity

Some states are asking Congress to intervene and bring more clarity on the internet sales tax collection. 

• Sellers file only one return at one rate

• One audit per state instead of audit exams by local governments.

Businesses that are not big enough to have their own tax departments are struggling. 

The threshold for marketplaces is $100,000 in sales. The threshold for remote sellers is $200,000 in calendar year 2019, $150,000 in calendar year 2020 and $100,000 in calendar year 2021 after that time