Insights

South Dakota's Sales Tax Dilemma With Online Retailers

Nexus in South Dakota?

There has been a lot of buzz regarding South Dakota's new law requiring certain remote sellers, even with no presence in the state, to collect and remit sales tax.

In the short time that this law has been into effect, there is a lawsuit over four big online retailers and the state.

According to an Internet Retailer article, the four big online retailers include Newegg Inc., Overstock.com Inc., Systemax Inc., and Wayfair LLC.

"The suit seeks the court to affirm that South Dakota may require the four web-only retailers to collect and remit sales tax. The lawsuit is explicitly aimed at forcing the U.S. Supreme Court to reverse its 1992 ruling in a case known as Quill Corp. v. North Dakota in which the high court rules that only a company with a physical presence in a state—such as a store, office or warehouse—could be required to collect sales tax from state residents."

Amazon, another large online retailer, collects sales tax in 28 states, but not in South Dakota. Amazon recently ended its affiliate program in Louisiana after Act. No. 22 was signed, allowing the state to tax businesses with no physical presence inside its borders. The retailer has also been dealing with the Amazon Webstore shutting down.

Why Vertex Inc.?

Legislation is being proposed that will change tax laws across the country and online. States are constantly looking for new ways to bring in revenue and audit protection and compliance are more important than ever.

We have designed an innovative interface and user experience that reduces the time, effort, and risk of managing sales tax compliance. Our end-to-end service model is unique in our industry, because it was built with the end result of compliance in mind. This ensures that the returns and compliance data you submit to the agencies is right the first time—every time.

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