Marcum LLP
Insights

Tax Flash - State & Local Taxation

 

In This Edition

Changes in Sales Tax Laws for U.S. States

Share:

The United States Supreme Court today rendered its decision in South Dakota v. Wayfair, Inc., a seminal case that will have a profound effect on sales taxation in all 50 U.S. states.

SUMMARY

The Court decided the case in favor of South Dakota.

The case centered on when a business is required to collect and remit sales tax in the state of a purchaser and whether sales alone create “nexus” (the ability of a state to subject a business to its taxes).

The State of South Dakota enacted a law whereby an entity with a minimum of $100,000 in sales, or 200 individual transactions, in the state is required to collect South Dakota's sales tax. This law was in direct contradiction of a 1992 Supreme Court case (Quill Corp. v. North Dakota) which required an entity to have "physical nexus" in order to have a sales tax collection requirement. Physical nexus meant that an employee or other property of the company had to be physically present in the state.

The South Dakota law required only that sales within the state exceed $100,000 over the course of a year for the seller to become subject to the sales tax collection requirement.

As a result of this decision, there will be a dramatic shift in how sales tax is applied across the country, as a number of states have enacted similar laws. Retailers transacting business may now be required to collect and remit sales tax in any state, whether or not they have physical nexus in that state.

The Marcum LLP State and Local Tax Department will provide a more detailed analysis once a thorough review of the decision has been completed.

 
Related
Paul Graney, State & Local Tax Leader, Tax & Business

State & Local Tax Leader
Tax & Business
Boston, MA
 
 
 
HAVE A QUESTION? ASK MARCUM
 
STAY IN TOUCH.

SIGN UP TODAY FOR MARCUM'S NEWSLETTERS.

ABOUT MARCUM LLP

Marcum LLP is one of the largest independent public accounting and advisory services firms in the nation, with offices in major business markets throughout the U.S., as well as Grand Cayman, China and Ireland.

Learn More

CONNECT WITH US
OFFICES

Headquarters
750 3rd Avenue, 11th Floor
New York, NY 10017

Find an Office

(855) MARCUM1
info@marcumllp.com

FOUNDATION

Marcum Foundation

AFFILIATIONS

Leading Edge Alliance

Privacy Policy

This website uses cookies to learn how visitors interact with our website so that we can improve our services and your online experience. By using this website, you agree to our privacy policy.