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.
Anna Ferraro, from the accounting firm Moss Adams, conducted a walk-through of the Wayfair decision during a SEMA sponsored webinar on October 17, and explained how it may impact SEMA member companies with remote sales or drop shipments. Issues covered included: Does your company already have a physical presence in the state? If so, why shouldn’t your company quickly register to pay sales tax? How do you register with the state? How do you remit taxes? What are some tax software options?