By Joanna Agosta Shere

On June 21, 2018, the South Dakota vs. Wayfair case changed the tax landscape for internet sales tax. The U.S. Supreme Court decided in favor of South Dakota in giving states the option of requiring sales tax collection by remote retailers (internet, mail-order, phone, etc.) when the seller doesn’t otherwise have a physical presence in the state (property, employees, sales representatives, etc.). The Court recognized companies could establish a sufficient economic presence in a state to create nexus, in addition to a physical presence. In this case, the Court recognized South Dakota’s law setting economic nexus at $100,000 or 200 in yearly sales transactions into that state as being reasonable. In so doing, the Court overturned its 1992 Quill Corp. vs. North Dakota ruling that required a physical presence when taxing interstate commerce. 

The 2018 Court ruling poses a potential challenge for a small business’ ability to monitor sales where a company does not have a physical presence and address the different state tax policies and procedures. This can be a very difficult, and expensive, landscape to cover for the small business selling online.

First of all, it would be a good recommendation to work with a business tax specialist who can help guide you through the various state requirements. Five states do not have sales tax requirements. Most others now have minimum sales or transaction thresholds for creating economic nexus or are in the process to establishing them. For example, in Massachusetts, you only create nexus once you have sold at least $500,000 worth of goods or services or at least 100 transactions. Many other states have adopted the South Dakota approach of $100,000 of sales or 200 transactions. Once you have reviewed your sales data, you can then determine if you need to collect sales tax.

Only selling business-to-business does not necessarily get you off the hook for collecting sales tax. Most states require that you possess their re-sell certificates in order to not charge for sales tax. These exemption certificates need to be updated periodically depending upon each state’s policies.

An example of another consideration is displaying and/or selling at swap meets. Some states have tradeshow exemptions, but in other cases, by displaying product in that state, you have created physical nexus even if you do not meet the sales or transaction minimum thresholds. Drop shipments may also create nexus. Even if you sell to a business with a re-sell certificate, if you drop ship that order for them into another state, you may be creating nexus unless they are able to provide you with a sales and use tax certificate for each state in which they have customers.  

Trying to keep up with all the different state tax laws can easily become an administrative nightmare. There are some different tax software programs that can help. From the very expensive to more reasonable, prices vary significantly, and you will need to determine which one best suits your need.  

Before dashing out and registering with states to collect sales tax and buying a software program, some good advice might be to step back and review the tax landscape. Are your sales close to meeting any of the state economic thresholds? Do you already have a physical presence in a state (e.g. sales representatives) and a tax collection liability? Are there any other state tax liabilities to consider (e.g. Ohio’s corporate activity tax based on $500,000 or more by an out-of-state company).  The sales tax review process is important since all states have a voluntary disclosure agreement process to address and limit existing tax liabilities, but the process is not available once you have registered to collect state sales tax.  

As always, seek out professionals who specialize in tax concerns. There’s no one solution and you need to do what’s best for your organization. Seeking knowledge on these changes will help protect you from tax liability and penalties down the road.

Below are states pursuing out-of-state sales tax collections, as of February 28, 2019.  

*Rhode Island, Washington and Georgia allow retailers to include a statement telling customers to submit sales tax in lieu of collecting the tax; those retailers must send Georgia customers with more than $500 in purchases a tax statement each year; in Washington, retailers with more than $100,000 in sales to the state must collect tax.
**Colorado has a grace period that will run through May 31, 2019.
***Idaho does not have an economic nexus law, but it does have click-through nexus, where a seller contracts with an in-state retailer to refer customers to the seller for commissions, effective July 1, 2018.
****Tennessee signed an online tax legislation into law, then passed another law prohibiting enforcement of the passed law.

By Joanna Agosta Shere

On June 21, 2018, the South Dakota vs. Wayfair case changed the tax landscape for internet sales tax. The U.S. Supreme Court decided in favor of South Dakota in giving states the option of requiring sales tax collection by remote retailers (internet, mail-order, phone, etc.) when the seller doesn’t otherwise have a physical presence in the state (property, employees, sales representatives, etc.). The Court recognized companies could establish a sufficient economic presence in a state to create nexus, in addition to a physical presence. In this case, the Court recognized South Dakota’s law setting economic nexus at $100,000 or 200 in yearly sales transactions into that state as being reasonable. In so doing, the Court overturned its 1992 Quill Corp. vs. North Dakota ruling that required a physical presence when taxing interstate commerce. 

The 2018 Court ruling poses a potential challenge for a small business’ ability to monitor sales where a company does not have a physical presence and address the different state tax policies and procedures. This can be a very difficult, and expensive, landscape to cover for the small business selling online.

First of all, it would be a good recommendation to work with a business tax specialist who can help guide you through the various state requirements. Five states do not have sales tax requirements. Most others now have minimum sales or transaction thresholds for creating economic nexus or are in the process to establishing them. For example, in Massachusetts, you only create nexus once you have sold at least $500,000 worth of goods or services or at least 100 transactions. Many other states have adopted the South Dakota approach of $100,000 of sales or 200 transactions. Once you have reviewed your sales data, you can then determine if you need to collect sales tax.

Only selling business-to-business does not necessarily get you off the hook for collecting sales tax. Most states require that you possess their re-sell certificates in order to not charge for sales tax. These exemption certificates need to be updated periodically depending upon each state’s policies.

An example of another consideration is displaying and/or selling at swap meets. Some states have tradeshow exemptions, but in other cases, by displaying product in that state, you have created physical nexus even if you do not meet the sales or transaction minimum thresholds. Drop shipments may also create nexus. Even if you sell to a business with a re-sell certificate, if you drop ship that order for them into another state, you may be creating nexus unless they are able to provide you with a sales and use tax certificate for each state in which they have customers.  

Trying to keep up with all the different state tax laws can easily become an administrative nightmare. There are some different tax software programs that can help. From the very expensive to more reasonable, prices vary significantly, and you will need to determine which one best suits your need.  

Before dashing out and registering with states to collect sales tax and buying a software program, some good advice might be to step back and review the tax landscape. Are your sales close to meeting any of the state economic thresholds? Do you already have a physical presence in a state (e.g. sales representatives) and a tax collection liability? Are there any other state tax liabilities to consider (e.g. Ohio’s corporate activity tax based on $500,000 or more by an out-of-state company).  The sales tax review process is important since all states have a voluntary disclosure agreement process to address and limit existing tax liabilities, but the process is not available once you have registered to collect state sales tax.  

As always, seek out professionals who specialize in tax concerns. There’s no one solution and you need to do what’s best for your organization. Seeking knowledge on these changes will help protect you from tax liability and penalties down the road.

Below are states pursuing out-of-state sales tax collections, as of February 28, 2019.  

*Rhode Island, Washington and Georgia allow retailers to include a statement telling customers to submit sales tax in lieu of collecting the tax; those retailers must send Georgia customers with more than $500 in purchases a tax statement each year; in Washington, retailers with more than $100,000 in sales to the state must collect tax.
**Colorado has a grace period that will run through May 31, 2019.
***Idaho does not have an economic nexus law, but it does have click-through nexus, where a seller contracts with an in-state retailer to refer customers to the seller for commissions, effective July 1, 2018.
****Tennessee signed an online tax legislation into law, then passed another law prohibiting enforcement of the passed law.

Compiled by SEMA Editors

Jeff Morgan

Permatex Promotes Jeff Morgan to National Account Manager of Automotive Groups – U.S.

Permatex has promoted Jeff Morgan to national account manager of automotive groups–U.S. In this new role, Morgan is responsible for developing and maintaining account relationships, growing sales and creating promotional and advertising programs to drive business to group members. In addition to the major accounts, Morgan will also manage smaller, independent automotive buying groups. During his two decades with Permatex, Morgan has served as account manager–Southeast U.S., account manager–key accounts, national sales manager–groups and key accounts, and district manager. Prior to joining Permatex, Morgan also worked with Loctite Corp., Pet Dairy, Frito-Lay and Pepsico in a variety of distribution and sales positions.

Marx Group and Eisbrenner Public Relations Will Merge to Form Marx Buscemi Eisbrenner Group

Marx Group and Eisbrenner Public Relations have agreed to merge and form Marx Buscemi Eisbrenner Group LLC. The deal will close in April 2019. The new agency brings together two experienced firms to provide integrated B2B and B2C marketing communications services to the global automotive, mobility, tech, trucking and consumer goods industries. Marx Buscemi Eisbrenner Group will be headquartered in Bloomfield Hills, Michigan, with a second location in San Rafael, California. The company will be led by Frank Buscemi, who will serve as CEO and chief creative officer; Tom Eisbrenner, president; and Tom Marx, chairman and chief strategy officer. The Eisbrenner team will relocate from Royal Oak to Bloomfield Hills during the spring of 2019. The new agency will continue the affiliation that Marx Group has with Near Perfect Media, which provides public relations and marketing for professionals, corporations and celebrities.

Bonnier Corp. Hires Industry Veteran Peter MacGillivray to Lead Off-Road and Motorsports Events

Peter MacGillivray has been named vice president off-road and motorsports vertical leader for Bonnier Corp. MacGillivray will oversee a portfolio that includes Off-Road Expo, Sand Sports Super Show, 4Wheel Jamboree, Street Machine Nationals and Jeep Invasion. MacGillivray spent the past 17 years working as vice president of events and business development for the SEMA Show.

Voodoo Ride Announces Distribution Partnership With O’Reilly Auto Parts

Voodoo Ride has announced a partnership with O’Reilly Auto Parts that will allow the parts retailer to carry Voodoo Ride products in more than 2,600 stores and online. The O’Reilly Auto Parts will carry a number of Voodoo Ride’s car-detailing products, including its all-surface detailer, acid-free wheel cleaner, car soap and tire dressing. Consumers will also have the option to order detailing products on the O’Reilly website and have them shipped to the nearest store location. This partnership will provide key distribution channels for Voodoo Ride’s line of automotive detailing and car-care products and will lay the groundwork for future product-line expansion.

The Brembo Group has inaugurated its new 40,000-square-meter production hub for the manufacturing of aluminum brake calipers in Nanjing, China.

Brembo Inaugurates Its New Aluminum Brake Caliper Production Hub in Nanjing

The Brembo Group has inaugurated its new production hub for the manufacturing of aluminum brake calipers in Nanjing, located in China's Jiangsu province. President Alberto Bombassei was there to welcome the distinguished Italian and Chinese authorities who were present. After nearly 20 years of operating in the Chinese market, Brembo has set up a new production hub next to the existing plant where brake discs are manufactured. The hub covers an area measuring almost 40,000 square meters. All of the production stages in the value chain have been integrated into the new site, from delivery of raw material to shipping the finished product. Doing so ensures better service for the factories belonging to Brembo customers in Europe, Asia and America that operate in Asia. The plant contributes about 100 million euros per year to the Group’s turnover and employs 450 people. With 67 production lines, from calipers to knuckles, and the foundry, the facility offers a production capacity of more than 2 million pieces per year and adopts the most advanced technologies available today.

Battery-Biz Secures the Goodyear Brand for Tire Inflators

Battery-Biz has announced that it has entered into a licensing agreement with Goodyear, and will launch an all-new line of Goodyear-branded tire inflators. The collection of inflators is set to start shipping this summer in North America. Under the agreement, Battery-Biz will have the right to sell Goodyear-branded tire inflators through all major retail channels in the United States and Canada.

Have some company news you would like to share? Let us know and the news may appear in an upcoming issue of SEMA eNews. Send your items for consideration to editors@sema.org.

Wade Kawasaki shares details about the many ways that SEMA helps businesses succeed, and what the association does for the automotive industry overall. From legislative efforts to an event app, SEMA advocates for the automotive specialty-equipment industry.

Wade Kawasaki shares details about the many ways that SEMA helps businesses succeed, and what the association does for the automotive industry overall. From legislative efforts to an event app, SEMA advocates for the automotive specialty-equipment industry.

The Mustang Bullitt just debuted last year at the 2018 North American International Auto Show (NAIAS), so this seems a bit early for a refresh. Just a couple weeks ago spy shooters caught a glimpse of a camo’ed GT and had speculated (per sources) that it may be a mule for a Mustang hybrid. That could be a solid option, but it's confirmed that this Bullitt was packing a 5.0 V8, as the driver made a point of revving the engine as he drove by.

Looking at the Bullitt, the only real changes that can be seen are the placement of the foglights, which appear to sit a couple inches higher on the front fascia, and the area below the foglights, which now appears to angle in toward the grille. Around back, there are virtually no changes, just a hacked-up lower rear fascia with some testing tips.

If this is just a refresh for the Bullitt, expect an official debut by the end of the year.

Photo credit: Brian Williams, SpiedBilde

The Mustang Bullitt just debuted last year at the 2018 North American International Auto Show (NAIAS), so this seems a bit early for a refresh. Just a couple weeks ago spy shooters caught a glimpse of a camo’ed GT and had speculated (per sources) that it may be a mule for a Mustang hybrid. That could be a solid option, but it's confirmed that this Bullitt was packing a 5.0 V8, as the driver made a point of revving the engine as he drove by.

Looking at the Bullitt, the only real changes that can be seen are the placement of the foglights, which appear to sit a couple inches higher on the front fascia, and the area below the foglights, which now appears to angle in toward the grille. Around back, there are virtually no changes, just a hacked-up lower rear fascia with some testing tips.

If this is just a refresh for the Bullitt, expect an official debut by the end of the year.

Photo credit: Brian Williams, SpiedBilde

The Mustang Bullitt just debuted last year at the 2018 North American International Auto Show (NAIAS), so this seems a bit early for a refresh. Just a couple weeks ago spy shooters caught a glimpse of a camo’ed GT and had speculated (per sources) that it may be a mule for a Mustang hybrid. That could be a solid option, but it's confirmed that this Bullitt was packing a 5.0 V8, as the driver made a point of revving the engine as he drove by.

Looking at the Bullitt, the only real changes that can be seen are the placement of the foglights, which appear to sit a couple inches higher on the front fascia, and the area below the foglights, which now appears to angle in toward the grille. Around back, there are virtually no changes, just a hacked-up lower rear fascia with some testing tips.

If this is just a refresh for the Bullitt, expect an official debut by the end of the year.

Photo credit: Brian Williams, SpiedBilde

The Mustang Bullitt just debuted last year at the 2018 North American International Auto Show (NAIAS), so this seems a bit early for a refresh. Just a couple weeks ago spy shooters caught a glimpse of a camo’ed GT and had speculated (per sources) that it may be a mule for a Mustang hybrid. That could be a solid option, but it's confirmed that this Bullitt was packing a 5.0 V8, as the driver made a point of revving the engine as he drove by.

Looking at the Bullitt, the only real changes that can be seen are the placement of the foglights, which appear to sit a couple inches higher on the front fascia, and the area below the foglights, which now appears to angle in toward the grille. Around back, there are virtually no changes, just a hacked-up lower rear fascia with some testing tips.

If this is just a refresh for the Bullitt, expect an official debut by the end of the year.

Photo credit: Brian Williams, SpiedBilde

The Mustang Bullitt just debuted last year at the 2018 North American International Auto Show (NAIAS), so this seems a bit early for a refresh. Just a couple weeks ago spy shooters caught a glimpse of a camo’ed GT and had speculated (per sources) that it may be a mule for a Mustang hybrid. That could be a solid option, but it's confirmed that this Bullitt was packing a 5.0 V8, as the driver made a point of revving the engine as he drove by.

Looking at the Bullitt, the only real changes that can be seen are the placement of the foglights, which appear to sit a couple inches higher on the front fascia, and the area below the foglights, which now appears to angle in toward the grille. Around back, there are virtually no changes, just a hacked-up lower rear fascia with some testing tips.

If this is just a refresh for the Bullitt, expect an official debut by the end of the year.

Photo credit: Brian Williams, SpiedBilde