In 2018, the U.S. Supreme Court issued its Wayfair decision that allows states to require sales tax collections based solely on the volume of sales into that state (economic nexus). The Court overturned its 1992 Quill decision, which previously required a company to have a physical presence before it could be compelled to collect sales tax.
Cash-strapped states have quickly implemented their new authority. Nearly all 45 states that collect sales tax have updated their regulations to require collection. There is no one national standard. Rather, each state is setting minimum dollar thresholds that trigger collection. In some states, that threshold may also be tied to the number of sales transactions—for example, $100,000 in sales or 200 transactions annually.
Representatives from the accounting firm Moss Adams conducted a webinar on Thursday, October 17 and walked through many scenarios and questions on the subject. While the ruling is primarily focused on retail sales, a manufacturer who drop ships or sells direct can also be impacted. Below are links to a recording of the webinar and accompanying power point slide decks.