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South Dakota v. Wayfair Update: Kentucky

The Supreme Court’s decision to overturn Quill and remove the physical presence requirement for state sales tax collection was due in part to the recognition that South Dakota and similarly situated states have removed the "undue burdens" which the Court was concerned with in the earlier watershed case. Because the nexus thresholds Kentucky adopted in HB 487 are the same thresholds at issue in the Wayfair case, the state is positioned to move forward with the planned July 1, 2018 implementation of these provisions for remote sellers with sales into the state.

Kentucky House Bill 487 defines remote retailers as those with no physical presence in Kentucky. Starting July 1, 2018, the legislation requires remote retailers to register and collect Kentucky sales and use tax if they have:

  • 200 or more annual sales transactions; or
  • $100,000 or more in annual gross receipts from sales into the state.

The announcement from the Kentucky Department of Revenue states that “…the Supreme Court decision positions Kentucky to move forward with implementation of these provisions for remote sellers with sales into the state,” and “Remote sellers that meet the threshold transaction or receipt thresholds should prepare to begin the registration process for collection of Kentucky sales and use tax on a prospective basis.”

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