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State Sales Tax Changes

The decision to overturn Quill has dramatically affected the way states collect sales tax for remote sellers. Let Vertex be the constant among the ever-changing landscape.

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The landscape of sales tax is changing since the Supreme Court overturned Quill in June 2018. States are now in the process of deploying economic nexus thresholds that apply to online retailers. Each state has their own specific rules to address the shift to economic nexus, with varying effective dates.

To browse which states we have heard from since the decision, please reference the map. For more detailed information around the tax law changes, please read the table below.*

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The table below offers an overview of all of these tax rules. Click through to individual states for more in-depth descriptions of their new rules.

Remote Seller Nexus Rules

Remote Seller Nexus Rules
Economic Nexus Presence Effective Date Thresholds Triggering Collection Obligation Transaction Included in Threshold Test Full Details

Alabama

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $250,000 and conducting one or more specified activities
Transaction Included In Threshold Test Sales of TPP delivered into the state

On July 3, 2018, following the South Dakota v. Wayfair decision, the Alabama Department of Revenue announced its existing “economic nexus” rule 810-6-2-.90.03, which took effect in January 2016, will be applied prospectively for sales made on or after October 1, 2018.

Remote sellers with more than $250,000 in annual Alabama sales should register for the Alabama Simplified Sellers Use Tax Program (SSUT) and begin collecting no later than October 1, 2018. Remote sellers seeking to comply with this existing rule can register to collect SSUT here. The state has posted a set of FAQs for remote sellers, including information on the SSUT 8% flat rate that may be used for sales into Alabama regardless of the local jurisdiction.

In addition, marketplace facilitators with Alabama online sales in excess of $250,000 are required to collect tax on sales made by or on behalf of its third-party sellers or to comply with reporting and customer notification requirements. The Act mandates compliance with reporting or remitting requirements on or before January 1, 2019. However, marketplace facilitators desiring to collect and remit on behalf of their marketplace sellers starting on October 1 may begin collecting and remitting taxes on marketplace sales may do so through the SSUT program upon completion of the application and registration process.

Arkansas

Effective Date 1/1/2019
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP and services delivered into the state

On August 22, following the South Dakota v. Wayfair decision, the Arkansas Tax Reform and Relief Legislative Task Force released its final report which contains a proposal to create South Dakota-style sales tax collection thresholds for remote sellers.

Under the task force’s proposal for remote sales tax collection, out-of-state sellers with over $100,000 in sales or at least 200 separate sales transactions would have to collect and remit sales and use tax to the state.

In March 2017, the House defeated S.B. 140 that would have required an online retailer without a physical presence in the state to collect and remit state sales and use tax if its current or prior-year gross revenue from sales exceeded $100,000 or if it engaged in at least 200 separate transactions. They believe the measure would pass now that the Court approved South Dakota’s law.

The task force will meet again in late August to approve the final report before sending it to other legislative leaders.

Click here for more information regarding remote sellers.

Update: On September 27, the Arkansas Bureau of Legislative Research unveiled six draft bills reflecting a task force's tax reform recommendations. The sales tax bill would have the same minimum nexus thresholds as those in South Dakota, requiring an online retailer without a physical presence in the state to collect and remit state sales and use tax if its current or prior-year gross revenue from sales exceeded $100,000 or if it engaged in at least 200 separate transactions. It would also repeal the state's click-through and affiliate nexus provisions and would not apply the remote seller collection obligation retroactively. If approved, the remote seller provision will be in effect beginning January 1, 2019.

California

Effective Date TBD
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP and services delivered into the state

According to an alert from California Department of Tax and Fee Administration,the state has yet to make any changes related to the Supreme Court’s decision in South Dakota v. Wayfair but is in the process of reviewing the opinion.

Retailers can monitor for changes and updates on the Tax Department’s news page.

Update: The California Department of Tax and Fee Administration (CDTFA) inadvertently posted a draft notice containing new tax collection rules for retailers, indicating that California may adopt use tax collection thresholds for remote vendors similar to the thresholds adopted under South Dakota’s law. The draft notice, which was apparently written before the Wayfair decision was announced, stated that certain retailers are required to register with the CDTFA and to collect California use tax starting August 1, 2018 if they meet one of the following thresholds during the preceding or current calendar year:

  1. the cumulative sales price of the retailer’s sales of tangible personal property for delivery in California exceeds $100,000; or
  2. the retailer sold tangible personal property for delivery in California in 200 or more separate transactions.

The CDFTA removed the draft notice from its website shortly after it was posted.

Update: The California Department of Finance has prepared draft legislative language that would impose sales tax collection obligations on remote sellers with $500,000 of annual sales into the state and require marketplace facilitators to collect and remit tax on third-party sales. The remote sales tax collection requirement would not apply retroactively.

The provisions were provided to stakeholders for input. However, the language has not yet been inserted into a bill or publicly released.

Update: California’s legislative language to require remote sellers to collect and remit California’s use tax if they annually have $500,000 or more in retail sales into the state died with the end of the state’s legislative session. Because the draft language was never introduced into a bill and lawmakers are out of session, no action is expected until the next regular legislative session begins in January 2019.  However, it is still possible that the state could issue regulatory guidance in response to Wayfair in the meantime.

Update: On October 15, the California State Assembly held an informational hearing regarding the implementation of the Wayfair ruling. Director of the California Department of Tax and Fee Administration (CDTFA) Nicolas Maduros said the department is proceeding with stakeholder talks and anticipates being able to implement sales tax collection and remittance obligations on remote retailers beginning early 2019.

California’s authority includes the ability to pursue remote sales tax collection from sellers that meet the thresholds upheld in the case — 200 or more annual sales transactions or over $100,000 in yearly sales into the state. However, the nexus thresholds will not be retroactive because of California’s larger population and a more complicated sales tax regime.

Update: In an October 24 meeting held by the California Department of Tax and Fee Administration (CDTFA) to gather input from business and tax professionals, California officials appear likely to proceed with South Dakota-style thresholds ($100,000 in annual gross revenue from sales into the state or 200 or more yearly transactions in state sales) when the state begins requiring sales tax collections form remote sellers early next year.

The CDTFA plans to issue notice without a formal regulatory process and will likely seek to require businesses that made sufficient sales in 2018 to meet the threshold to begin registering and remitting tax on subsequent sales by early next year. Officials said the state would not seek retroactive application of Wayfair. This guidance would be in place until the legislature enacts any alternative threshold. A threshold of $500,000 in sales had been suggested earlier this year, but no legislation was passed.

The CDTFA also asserted that thresholds would be applied to each local taxing district individually.

Colorado

Effective Date 12/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP and services delivered into the state

The Colorado Department of Revenue adopted an emergency regulation regarding out-of-state vendors. Colorado will now collect state sales tax and state-collected local and special district sales tax from out-of-state sellers. This will require out-of-state retailers to get a state of Colorado Sales Tax license to collect and remit sales tax. Collection of those taxes will begin the first day of the month after issuance of the sales tax license. The first day to start collecting and remitting sales tax is December 1, 2018. Out-of-state retailers are not required to collect sales tax on sales prior to registration.

A remote retailer must register and collect Colorado sales tax if they meet either or both of the following conditions in the previous calendar year or the current calendar year:

  • 200 or more sales of tangible personal property or services into the state; or
  • more than $100,000 in gross receipts from sales of tangible personal property or services into the state.

Out-of-state retailers that meet the above qualification must apply for a Colorado Sales Tax license by November 30, 2018.

Update: The Colorado Department of Revenue has issued proposed permanent regulations regarding remote sellers. Like the earlier issued emergency regulations, this proposal reflects that Colorado will collect state sales tax and state-collected local and special district sales tax from out-of-state retailers meeting established economic nexus thresholds as of December 1, 2018.

Under the proposal, an out-of-state retailer generally must apply for a Colorado sales tax license and collect Colorado sales tax if, in either the previous or current calendar year, the retailer has:

  • more than $100,000 of gross sales or services delivered in Colorado, including exempt sales; or
  • 200 or more transactions selling tangible personal property or services delivered in Colorado.

The Department will hear these proposed amended rules at a permanent rulemaking hearing scheduled on October 30, 2018.

Update: The Colorado Department of Revenue proposed amendments to the remittance of tax rule to clarify the criteria that determine a retailer's liability and responsibility to collect sales tax. These amendments include language to incorporate the economic nexus thresholds provided for in the emergency and proposed permanent regulations.

Update: The Colorado Department of Revenue will require destination sourcing for local sales tax reporting requirements for in-state retailers. Effective December 1, 2018, new sourcing rules state that sales tax must be collected and remitted based on the jurisdiction’s tax rate at the point of delivery for the taxable good when taxable goods are delivered to a Colorado address outside the retailer’s jurisdiction. This includes any applicable state-administered local and special district taxes.

Update: The Colorado Department of Revenue announced that the hearing on proposed permanent economic nexus regulations that was scheduled for October 30, 2018, has been postponed to November 30, 2018.

Connecticut

Effective Date 12/1/2018
Highlights
Thresholds Triggering Collection Obligations At least $250,000 and 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

Just days before the U.S. Supreme court ruling on South Dakota v. Wayfair was announced, Connecticut Governor Dan Malloy signed legislation requiring marketplace facilitators to collect and remit sales and use tax and adjusting the economic nexus thresholds for all remote sellers. 

Effective December 1, 2018, remote sellers are required to collect and remit tax on each third-party sale into the state if they:

  • Have 200 or more separate sales transactions into the state (100 or more prior to Dec 1, 2018); and
  • Have at least $250,000 in annual gross receipts from sales into the state.

On July 17, the Connecticut Department of Revenue Services released a special notice summarizing these rules.

For more information and updates visit Connecticut’s Department of Revenue.

Update: On November 6, the Connecticut Department of Revenue Services issued an Office of The Commissioners Guidance publication. Effective December 1, 2018, marketplace facilitators are required to collect and remit tax on behalf of remote sellers.

As stated in the publication, a marketplace facilitator is any person who:

  • Facilitated retail sales of at least $250,000 during the prior twelve-month period by marketplace sellers by providing a forum that lists or advertises tangible personal property subject to sales and use taxes or taxable services, including digital goods, for sale by such marketplace sellers;
  • Directly or indirectly through agreements or arrangements with third parties, collects receipts from the customer and remits payments to the marketplace sellers; and
  • Received compensation or other consideration for its services.

District of Columbia

Effective Date Proposed
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP and services delivered into the state

The District of Columbia Council introduced a bill (bill 22-914) requiring sellers that receive a gross revenue of more than $100,000 or have 200 or more separate transactions from the sale of tangible personal property or services into the District to register to collect and remit sales and use tax.

If approved, the bill would become effective upon approval by the mayor after a 30-day period of congressional review and publication in the District of Columbia Register. Revenues from the measure would be dedicated to reducing the commercial real estate property tax rate by a specified amount, with any additional revenues accruing to the general fund.

A public hearing took place on October 10, 2018 to discuss further implementation of the bill.

Update:  At a public hearing for the proposed remote seller bill (Bill 22-914) on October 10th, District of Columbia’s assistant general counsel testified before the Committee on Finance Revenue offering suggested amendments designed to align the bill more closely with the South Dakota legislation that was the subject of the Wayfair case.

Specifically, the suggestions were:

  1. To incorporate the new requirements into the existing sales tax framework, rather than create a standalone section of the law;
  2. To clarify the definition of “products delivered electronically;”
  3. To address the requirements for sales tax collection by marketplace facilitators;
  4. To include a prospective effective date in the legislation; and
  5. To strike language suggesting the dedication of revenue to the reduction of property taxes.

Georgia

Effective Date 1/1/2019
Highlights
Thresholds Triggering Collection Obligations More than $250,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP and services delivered into the state

The Georgia Department of Revenue has issued a bulletin for out-of-state vendors regarding the remote sellers taxation and how the law will be enforced. Beginning January 1, 2019, Georgia will require remote sellers to collect and remit sales and use tax on sales of tangible personal property from outside the state into Georgia or comply with certain notice and reporting requirements.

In Georgia, remote sellers that meet one or both of the following criteria in the previous or current calendar year require:

  • More than $250,000 in gross revenue from retail sales of tangible personal property or services into the state; or
  • had retail sales in 200 or more separate transactions of tangible personal property delivered into the state.

A remote seller that has met one of the above thresholds that chooses not to collect, and remit sales or use tax must do the following:

  • Beginning January 1, 2019, notify each potential purchaser prior to the completion of each retail sale with the following statement: “Sales or use tax may be due to the State of Georgia on this purchase.  Georgia law requires certain consumers to file a sales and use tax return remitting any unpaid taxes due to the State of Georgia.”;
  • On or before January 31, 2020 and each year afterwards, send a sales and use tax statement, to each purchaser with retail sales that totaled $500.00 or more in aggregate during the previous calendar year containing the total amount paid by the purchaser for retail sales from the seller during the previous calendar year. 

For more information and updates visit The Georgia Department of Revenue website.

Hawaii

Effective Date 7/1/2018
Highlights
Thresholds Triggering Collection Obligations At least $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

Hawaii’s general excise tax (GET) is a privilege tax imposed on all business and other activities in the state. Following the South Dakota v. Wayfair ruling, the Hawaii Department of Taxation announced on June 27, 2018 the state will implement Act 41, effective July 1, 2018. Act 41 provides that a person is engaging in business in the State, regardless of whether the person is physically present in the state, is required to collect and remit GET if in the current or preceding calendar year they have:

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

Hawaii’s remote seller legislation differs from the South Dakota law in that it retroactively applies to taxable years beginning after December 31, 2017. Accordingly, if a taxpayer meets the $100,000 or 200-transaction threshold in calendar year 2017 or 2018, the taxpayer will be subject to GET for the tax year beginning after December 31, 2017. “Qualifying taxpayers” can report and pay GET on “catchup income” (income recognized between January 1, 2018 and June 30, 2018) without penalty or interest, by:

  • reporting and paying GET on all catchup income in full on their next periodic return due after July 20, 2018; or
  • spreading the liability over the remaining periods in the current tax year, beginning with the next periodic return due after July 20, 2018.

Update: The Hawaii Department of Taxation announced on July 12 that it will not seek retroactive enforcement of remote sales tax collection laws. The notice stated that no tax is required to be remitted for sales prior to July 1, 2018.

Idaho

Effective Date 7/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $10,000 and other stipulations
Transaction Included In Threshold Test Sales of TPP delivered into the state

Following the U.S. Supreme Court ruling on South Dakota v. Wayfair, the Idaho State Tax Commission announced the implementation of a new law requiring out-of-state sellers to collect Idaho sales tax when selling to customers in the state.

Idaho House Bill 578, which went into effect July 1, 2018, requires remote sellers to collect Idaho state tax if:

  • the out-of-state seller has an agreement with an Idaho retailer to refer potential buyers to the out-of-state seller for a commission; and 
  • the total sales to the Idaho buyers exceeded $10,000 in the previous year. 

The Idaho State Tax Commission is continuing to monitor the decision’s impact on out-of-state retailers, as well as future Congressional action or legal developments. Updates and more information are available on the Idaho State Tax Commission website.

Update: The Idaho State Tax Commission proposed a rule to implement recently enacted legislation by including out-of-state sellers in the definition of a retailer engaging in business within the state. A “retailer” is defined as “a person doing a regularly organized retail business in tangible personal property and defined services and selling to the user or consumer, not for resale”.  The rule would also provide guidance for retailers selling incidental personal property and agenting acting as retailers.

Illinois

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations At least $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

On September 10, the Illinois Department of Revenue issued sales tax guidance for remote sellers, effective October 1, 2018, following the enactment of Illinois Public Act 100-587.

The Act states that a remote seller must collect and remit sales tax to the state if they:

  • have at least $100,000 of gross sales of tangible personal property; or
  • make 200 or more separate sales transactions in the state.

For more information and updates, please visit Illinois’s Department of Revenue Services.

Update: On September 11, The Illinois Department of Revenue issued an emergency rule regarding remote sellers reflecting the details of the earlier guidance. The DOR began enforcing the new emergency rule on October 1, 2018.

The Illinois emergency rule requires a seller without a physical location in Illinois to obtain a registered retail merchant’s certificate, collect and remit applicable sales tax if the seller meets either or both of the following conditions in the previous calendar year or the current calendar year:

  • have at least $100,000 of gross sales into Indiana; or
  • make 200 or more separate transactions into Indiana.

In addition, the DOR has published a “Remote Seller Use Tax Matrix” and released a set of detailed “frequently asked questions” to further aid remote sellers.

Indiana

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

According to a statement from Indiana Governor Eric J. Holcomb, the state is in the process of reviewing the ruling in South Dakota v. Wayfair to determine its impact. The Indiana Department of Revenue website explains that the state “is currently prohibited from enforcing the obligation to collect sales tax from remote sellers until a declaratory judgment action currently pending in Indiana is resolved. Moreover, remote sellers are not obligated to register or collect Indiana sales tax until the declaratory judgment is resolved. That said, any merchant may voluntarily register and remit sales tax to Indiana.”

Indiana’s remote seller nexus law is similar to South Dakota’s and states that a remote seller must collect and remit sales tax to the state if they:

  • sell $100,000 or more in products and/or services; or
  • make 200 or more separate sales transactions in the state.

The Indiana Department of Revenue indicates on its FAQ page that it intends to enforce remote seller sales tax collection laws beginning October 1, 2018 unless the pending action is not resolved by then. Updates will be made to the FAQs as new information becomes available.

Update: On August 31, the Indiana Department of Revenue (DOR) emailed a bulletin to taxpayers regarding its enforcement of the state’s new economic nexus law effective October 1, 2018. Any merchant may voluntarily register and remit sales tax to Indiana prior to October 1, 2018 through the Streamlined Sales Tax Registration System or with Indiana’s INBiz portal.

Iowa

Effective Date 1/1/2019
Highlights
Thresholds Triggering Collection Obligations At least $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

On May 30, 2018, Iowa Governor Kim Reynolds signed a state tax reform bill (Senate File 2417) expanding the state’s sales tax collection to marketplaces and remote sellers. Portions of this bill will take effect on January 1, 2019. The Iowa Department of Revenue will not seek to impose sales tax liability for transactions completed prior to that date.

Similar to the South Dakota law debated in the Wayfair case, Iowa’s bill applies to retailers that:

  • sell $100,000 or more in products and/or services; or
  • make 200 or more separate sales transactions in the state.

The bill also requires marketplace facilitators to collect Iowa sales tax on behalf of sellers.

Update: Following the Wayfair decision, the Iowa Department of Revenue posted a statement on its website confirming that the state’s remote seller laws are effective January 1, 2019.

Update: The Iowa Department of Revenue issued guidance on November 15 regarding new remote seller and marketplace facilitator provisions and reminds taxpayers of the approaching January 1, 2019 implementation date. In this guidance, remote sellers that exceed a certain amount of revenue or transactions must charge Iowa sales tax, including local option sales tax. Remote sellers must collect and remit Iowa sales tax and local option sales tax if they have $100,000 or more of annual sales or 200 or more transactions into Iowa annually. Marketplace facilitators must also begin collecting Iowa sales tax and applicable local option sales tax on January 1, 2019.

Kentucky

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

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
  • More than $100,000 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.”

Update: The Kentucky Department of Revenue announced on July 30 that tax payers should begin collecting sales tax on October 1, 2018 and should contact the Department of Revenue with any concerns about complying with this timeframe.

Louisiana

Effective Date 1/1/2019
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

In the Louisiana Department of Revenue’s June 21 statement on the Wayfair decision, Louisiana Public Information Director Byron Henderson said that while Louisiana had adopted a provision very similar to that of South Dakota, it had not yet made final decisions related to the ruling.

Louisiana is currently collecting sales tax from large out-of-state retailers, as well as smaller companies. On June 12, 2018, Louisiana enacted legislation requiring the tax collection from out-of-state retailers who have:

  • More than $100,000 of sales; or
  • 200 or more transactions for delivery in Louisiana.

For ongoing news and updates from the State of Louisiana’s Department of Revenue, please visit its website.

Update: On August 10, the Louisiana Sales and Use Tax Commission for Remote Sellers issued a bulletin stating that it will not seek to enforce the collection of sales and use tax by remote sellers for any period beginning before January 1, 2019. Remote sellers that have voluntarily registered with the Louisiana Department of Revenue should continue remitting the tax using the DOR’s Form R-1031, "Direct Marketer Sales Tax Return," until further guidance is issued.

Maine

Effective Date 7/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

Following the South Dakota v. Wayfair decision, Maine Revenue Services announced it will enforce statute 1951-B, which requires a person selling tangible personal property, products transferred electronically or taxable services for delivery into Maine to collect and remit sales tax in the same manner as a retailer with a physical presence in Maine.

Maine has the same economic nexus thresholds as South Dakota, requiring remote sellers to collect and remit if they have:

  • more than $100,000 in sales; or 
  • 200 or more transactions into the state per year.

This statute will be enforced for sales occurring on or after July 1, 2018.

Maine Revenue Services advises sellers that are subject to section 1951-B and have not already done so to immediately register as a Maine retailer and begin collecting and remitting Maine sales and use tax. Any remote seller that, on or after July 1, 2018, met or meets one or both nexus thresholds, but did not register as a retailer, is subject to assessment for any uncollected or unremitted Maine sales and use taxes.

For more information and assistance visit Maine Revenue Services.

Maryland

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

On June 21, 2018, the United States Supreme Court delivered its opinion in the South Dakota v. Wayfair decision. In a tax alert from the Maryland Comptroller, the  office said the agency will "impose sales tax collection requirements as broadly as is permitted under the U.S. Constitution," but provided no further guidance beyond including a link to the Court's decision and a promise of more guidance to come.

Currently, Maryland requires remote sellers to collect and remit sales tax if they have nexus in the state, even if it’s just minimal. The law does not, however, include any thresholds for activity, a crucial element of South Dakota’s law.  

It is unclear at this time whether the state will issue regulations to fully implement economic nexus or seek to enact additional legislation.

For ongoing news and updates from the Maryland Comptroller, please visit its website.

Update: On August 8, the Maryland comptroller has proposed to amend a sales and use tax regulation governing out-of-state vendors to include a person who sells tangible personal property or taxable services for delivery in the state, if, during the previous or current calendar year, the person's gross revenue from such sales exceeds $100,000 or the person engaged in at least 200 separate sales transactions. The regulation, if adopted, would be effective October 1, 2018.

Update: A Maryland legislative panel has approved emergency post-Wayfair regulations for remote sellers with minimum thresholds that mirror South Dakota's law. The regulations, which take effect October 1, were approved August 29 by the Joint Committee on Administrative, Executive and Legislative Review. The emergency regulations are effective until March 30, 2019. The office is in the process of completing a tax alert that will explain the regulations and the mechanics of compliance for retailers.

Update: On August 21, The Maryland Comptroller issued an emergency regulation for out-of-state vendors regarding the Supreme Court’s Wayfair decision. Effective October 1, 2018, a seller that has sales into the state exceeding $100,000 or that completes 200 or more separate transactions of sales into the state in the previous or current calendar year has nexus in Maryland and is required to remit sales or use tax on all its sales into Maryland and file all required returns. The emergency regulations will expire March 30, 2019.

Update: On August 29, the Maryland Comptroller approved emergency regulations regarding out-of-state vendors. It states that remote vendors that meet nexus requirements for the period October 1 through December 31 are required to register with the comptroller's office and collect and remit the state's sales tax on sales delivered into the state as soon as it meets one of the thresholds. The alert further stated that for the calendar year 2019 and subsequent years, remote vendors that were not previously required to register with the comptroller are required to begin tracking sales into Maryland and must register when one or both thresholds are met.

Massachusetts

Effective Date 10/1/2017
Highlights
Thresholds Triggering Collection Obligations More than $500,000 and 100 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

Massachusetts recently announced their existing regulation, 830 CMR 64H.1.7: Vendors Making Internet Sales, continues to apply and is not impacted by the Supreme Court’s decision to overturn Quill.

According to the regulation, which took effect October 1, 2017, an Internet vendor without physical presence in the state that is not otherwise subject to tax is required to register, collect and remit sales or use tax with respect to its Massachusetts sales if during the preceding calendar year:

  • it had more than $500,000 in Massachusetts sales from transactions completed over the Internet; and
  • made sales resulting in a delivery into Massachusetts in 100 or more transactions.

Update: The Massachusetts Department of Revenue has issued a technical information release explaining the department's position on remote sales tax collection. This statement reinforces the previously approved regulation governing when and how Massachusetts general sales and use tax jurisdictional standard applies to outside vendors.

Michigan

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

The Michigan Department of Treasury has issued guidance for out-of-state vendors regarding the Supreme Court’s Wayfair decision. The Revenue Administration Bulletin (RAB) states that a seller with substantial nexus in Michigan is required to remit sales or use tax on sales of taxable tangible personal property made into this state and file all required returns. Nexus can be established in several different ways:

  1. The seller can have physical presence in Michigan as described in RAB 1999-1.
  2. The seller can have representational, attributional, or “click-through” presence as described in RAB 2015-22.
  3. A seller can have economic presence as discussed in Wayfair.

After September 30, 2018, a seller that has sales into Michigan (both taxable and non-taxable) exceeding $100,000, or a seller that completes 200 or more separate transactions of sales into this state (both taxable and non-taxable) in the previous calendar year has nexus in Michigan and is required to collect and remit sales tax, as well as file returns on all such sales into the state.

Update: The Michigan Department of Treasury published RAB 2018-16 establishing a policy for out-of-state vendors. Effective October 1, 2018, an out-of-state vendor that has sales into Michigan exceeding $100,000 or completes 200 or more separate sales transactions into this state in the previous calendar year is required to remit sales and use tax on all its taxable sales into the state and file all required returns.

Also, the Treasury is currently in the process of creating a standard form for sellers to report the tax information for the transaction at issue and to affirm that no refund has, or will be, claimed in the future. This form will be available to taxpayers beginning January 1, 2019.

Minnesota

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations 100 or more retail sales or 10 or more retail sales totaling more than $100,000
Transaction Included In Threshold Test Retail sales of TPP delivered into the state

In a June 21 statement from the Minnesota Department of Revenue regarding South Dakota v. Wayfair, the department said it was currently analyzing the decision and how it will affect Minnesota and its online retailers, remote sellers and marketplace providers. The Minnesota Department of Revenue has stated that it will provide guidance within 30 days.

The announcement confirms that retailers already collecting and remitting tax to Minnesota, either directly or through a third party, should continue.

Out-of-state retailers that want to begin collecting and remitting taxes in Minnesota can register through the Streamlined Sales Tax Registration System.

Update: Following their initial statement regarding South Dakota v. Wayfair, the Minnesota Department of Revenue announced on July 25 it will require remote sellers and marketplace facilitators to begin collecting sales tax no later than October 1, 2018.

Minnesota has a Small Seller Exception, which does not require remote sellers to collect sales tax until their sales during a period of 12 consecutive months total either:

  • 100 or more retail sales shipped to Minnesota, or
  • 10 or more retail sales totaling more than $100,000 shipped to Minnesota.

The Court’s decision in Wayfair also caused Minnesota’s 2017 Marketplace Provider law to become effective, requiring certain marketplace providers to collect and remit Minnesota sales tax on all taxable retail sales made into Minnesota facilitated by the marketplace.

Update: On September 7, the Minnesota Department of Revenue issued updated local sales tax requirements for Minnesota sellers. According to the bulletin, “all Minnesota sellers – regardless of their location – must collect state and local sales taxes based on the location of their customer.” Minnesota sellers that are not already registered and collecting taxes in Minnesota localities where they make sales based on customer location must begin doing so by October 1, 2018 (for monthly and quarterly filers), or by January 1, 2019 (for annual filers).

Mississippi

Effective Date 9/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $250,000
Transaction Included In Threshold Test Sales of TPP delivered into the state

The Mississippi Department of Revenue is reviewing the Wayfair decision to determine its impact and planned actions. According to a statement issued on June 21, the department believes the ruling will level the playing field for Mississippi businesses that compete with online sellers.

Mississippi requires any out-of-state seller lacking physical presence to register and collect sales tax if their online sales into the state are greater than $250,000 for the prior 12-month period.

To follow current updates and changes to Mississippi’s official stance, visit the Department of Revenue’s website.

Update: The Mississippi Department of revenue announced on August 6 that the Department will allow online sellers to begin collecting Mississippi use tax for sales made on or after September 1, 2018 when sellers register to collect Mississippi tax by August 31, 2018.

Montana

Effective Date N/A
Highlights
Thresholds Triggering Collection Obligations N/A
Transaction Included In Threshold Test N/A

On June 21, 2018, the United States Supreme Court delivered its opinion in the South Dakota v. Wayfair decision. Montana residents purchasing goods or services online will generally not be affected because the state does not have a general sales tax.

According to statement from Montana’s Department of Revenue, Montana businesses selling products to buyers states, such as South Dakota, that require remote retailers to collect sales tax, will need to collect and pay those taxes.

Online retailers, should seek legal advice on how to proceed with collecting and remitting sales tax for states where they have economic nexus. 

Nebraska

Effective Date 1/1/2019
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Retail sales of TPP delivered into the state

On June 21, 2018, the United States Supreme Court issued its decision on South Dakota v. Wayfair. Following the Wayfair decision. According to a new release from the Department of Revenue on July 27, 2018, certain remote sellers now have a sales tax collection responsibility on sales made to customers in Nebraska.

Remote sellers engaged in business in Nebraska as defined under Neb. Rev. Stat. § 77-2701.13, must obtain a sales tax permit and begin collecting and remitting sales tax on sales made to customers on or before January 1, 2019. Remote sellers that are not engaged in any of the activities listed in this bill are not required to collect, but may register and volunteer to do so. The news release also stated that the Department may seek to introduce legislation if needed in early 2019.

There is an exception for remote sellers with sales of $100,000 or less, or, with fewer than 200 separate transactions in the state annually. The Nebraska Department of Revenue will not pursue retroactive sales tax collection from remote sellers that did not have physical presence in Nebraska for sales made to customers prior to January 1, 2019. 

For additional Information see the Nebraska Department of Revenue’s Frequently Asked Questions.

Nevada

Effective Date Proposed
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Retail sales of TPP delivered into the state

Following the U.S. Supreme court ruling on South Dakota v. Wayfair, the Nevada Department of Taxation has issued a proposed remote seller nexus administrative regulation that would revise its provisions relating to the imposition, collection and remittance of state sales and use tax by out-of-state retailers.

The proposal provides guidance to determine whether the activities of a retailer located outside Nevada has sufficient nexus to satisfy the requirements. The second section of the proposal provides guidance as to the date after which a retailer who satisfies the established criteria must begin to impose, collect and remit Nevada sales and use tax.

As currently drafted, the proposal would require remote sellers whose gross revenue from the sale of property in Nevada exceeds $100,000, or who make 200 or more retail sales within Nevada, in the immediately preceding calendar year or the current calendar year to collect and remit tax.

Update: On August 10, the Nevada Department of Taxation provided some answers to frequently asked questions involving remote sellers following the U.S. Supreme Court’s decision to overturn Quill

Update: On September 13, Nevada’s Tax Commission approved regulations that would require remote sellers to collect and remit the state’s sales and use tax. The regulations are scheduled to take effect in October, upon approval from the Legislative Commission. As with South Dakota’s remote sales tax law, Nevada's rules aren’t retroactive.

However, the Nevada Taxpayers Association argued that the state should wait and approve new legislation before seeking to enforce remote sales tax compliance. The state doesn’t have explicit statutory authorization to assert that a seller has a sales tax obligation based on in-state sales alone. Although the Association supports the decision, Nevada could potentially face legal challenges if it approves and seeks to enforce the regulations without updating state law.

New Hampshire

Effective Date N/A
Highlights
Thresholds Triggering Collection Obligations N/A
Transaction Included In Threshold Test N/A

In response to the Supreme Court’s decision in the case of South Dakota v. Wayfair, New Hampshire Governor Chris Sununu called on Council board members to consider legislation that would protect businesses from what New Hampshire considers improper attempts by other states to force sales and use tax collection. 

The plan would enact the following changes:

  1. Any out-of-state taxing authority must notify the New Hampshire Department of Justice before auditing or imposing tax collection obligations on a New Hampshire business.
  2. The taxing authority must receive a written determination from the New Hampshire Department of Justice that they meet certain protections and requirements.
  3. Protections and requirements will include a prohibition against retroactive enforcement, a safe harbor for small businesses and certain amounts of sales, and others. The out-of-state taxing authority will have to show its laws don’t impose an unconstitutional burden on New Hampshire businesses.
  4. The New Hampshire Department of Justice can file an expedited suit to block any tax collection obligations that violate this new law.

A special legislative session was called on July 25 to consider SB 1. The Bill was passed unanimously by the Senate but was blocked by the House due to concerns about constitutionality and a desire to establish a special commission that would study the issue and make a report by July 1, 2019. 

Update: On August 23, New Hampshire Governor Chris Sununu announced a plan to mitigate the effects of the Wayfair ruling. The state Department of Justice will gather “information related to efforts of other taxing jurisdictions to impose their sales and use tax obligations on New Hampshire businesses.” The Justice Department will also “prioritize efforts to detect and alert” residents about scammers pretending to be out-of-state tax authorities seeking sales and use tax payments.

There is also a new state website that will act as “a central clearinghouse for information about developments in the wake of the Wayfair decision.” The website will be updated by the state government, including the Justice Department, the Department of Business and Economic Affairs and the Department of Revenue Administration.

Two House Republicans are drafting legislation that would view any kind of sales and use tax collection obligations on New Hampshire remote sellers as unlawful and unconstitutional. The bill will be introduced during the new session in January.  

New Jersey

Effective Date 11/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP, digital products and services delivered into the state

Following the South Dakota v. Wayfair ruling, New Jersey lawmakers have amended a recently introduced remote seller bill to include marketplace provisions and push back the bill's effective date to October 1, 2018.

The bill's minimum thresholds are the same as those set by South Dakota. Remote sellers will be required to collect and remit sales tax if they have:

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

The amended bill also requires marketplace facilitators (“a person who provides a forum that lists, advertises, stores, or processes orders for tangible personal property subject to [sales tax] . . . collects receipts from a purchaser and remits payment to a marketplace seller") to collect and remit tax to the New Jersey Division of Taxation on behalf of third-party sellers. However, marketplace facilitators would not be required to collect and pay tax on retail sales made on behalf of third-party sellers if the sellers hold a certificate of registration and provide a copy of the certificate to the marketplace facilitator before the retail sale. A marketplace facilitator would also not be liable to a third-party seller for failing to collect and remit the right amount of tax if the discrepancy was caused by faulty information provided by the third-party seller to the marketplace facilitator.

Update: On July 1, the New Jersey legislature passed the first remote sellers bill responding South Dakota v. Wayfair. If signed by the governor, the bill would set the same thresholds as the South Dakota law and go into effect on October 1, 2018.  Under the New Jersey Constitution, the governor has 45 days to sign or veto a bill.  If no action is taken, the bill becomes law.

Update: On August 14, the New Jersey Division of Taxation issued guidance for remote sellers reflecting the language of the pending legislation.

Update: On August 27, Governor Phil Murphy conditionally vetoed the remote seller bill A. 4261/S. 2749. In his conditional veto, Murphy called on lawmakers to clarify that the law includes tangible property and digital products such as electronic books, music, movies, and ringtones; and services that are subject to sales tax under existing law. His proposed changes would also allow the state Division of Taxation to audit marketplace facilitators.

Update: On September 27, New Jersey Legislature passed a marketplace facilitator bill to take effect November 1. The bill is an alternative to A. 4261, a remote seller measure that was conditionally vetoed by Governor Phil Murphy in August.

New Jersey has the same economic nexus thresholds as South Dakota, requiring remote sellers to collect and remit sales 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 bill would authorize the director of taxation to suspend or delay the collection of taxes by a marketplace facilitator for no longer than 180 days. The bill would also require transient space marketplaces to collect and pay tax on behalf of persons providing transient accommodations in the state.

Update: On October 4, New Jersey Governor Phil Murphy signed into law legislation and requiring marketplace providers and some remote sellers to collect and remit sales taxes.

North Carolina

Effective Date 11/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

On August 7, 2018 the North Carolina Department of Revenue issued guidance following the South Dakota v. Wayfair decision in a Tax Directive.

Effective November 1, 2018, remote sellers are required to collect and remit sales and use tax on all taxable retail sales into North Carolina if the seller meets either or both of the following conditions in the previous calendar year or the current calendar year: 

  • gross revenue from sales exceeding $100,000; or
  • 200 or more separate transactions.

A remote seller must register and begin collecting and remitting tax by November 1, 2018, or 60 days after meeting the threshold (whichever is later). Remote sellers may voluntarily begin collecting and remitting sales and use tax any time prior to November 1, 2018.

To follow updates and other announcements regarding the decision visit North Carolina’s Department of Revenue.

North Dakota

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

The South Dakota v. Wayfair decision struck down the requirement that a vendor must have “physical presence” in a state to be subject to state sales and use tax registration and collection requirements. The North Dakota Office of State Tax Commissioner released a statement explaining that remote sellers are required to begin collecting tax on October 1, 2018 or 60 days after meeting the Small Seller Exception threshold. The statute requires collection of tax if a seller’s annual North Dakota sales exceed:

  • $100,000 in taxable sales shipped to North Dakota; or
  • 200 taxable transactions sales shipped to North Dakota in the current or previous calendar year.

Ohio

Effective Date In Review
Highlights
Thresholds Triggering Collection Obligations --
Transaction Included In Threshold Test --

In the Ohio Department of Taxation’s June 21 statement, Communications Director Gary Gudmundson confirmed the Supreme Court ruling to overturn Quill will not have an immediate impact on Ohio.

Under Ohio’s current law, R.C. 5741.01(i), out-of-state sellers are not required to collect and remit Ohio’s sales taxes unless a seller has physical presence in the state. Moving forward, the Ohio General Assembly will evaluate the new ruling and determine whether or not to change the state’s sales tax rules. 

Updates are posted on the Ohio Department of Transportation’s Twitter page.

Oklahoma

Effective Date 7/1/2018
Highlights
Thresholds Triggering Collection Obligations At least $10,000 or more in separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

The Oklahoma State Commission enacted the Marketplace Sales Act on April 10, 2018. The act requires businesses conducting sales through a website to either collect and remit the tax or provide tax responsibility notices to purchasers and report details to the tax commission. Following the U.S. Supreme Court’s South Dakota v. Wayfair ruling, Oklahoma Tax Commissioner Clark Jolley concluded that in the world of commerce post-Wayfair, “because we have already made huge strides in collecting taxes from major retailers, Oklahoma will likely not see a huge influx of cash.”

The Marketplace Sales Act requires remote sellers and marketplace facilitators to collect and remit sales tax if they have $10,000 or more in sales to Oklahoma customers in the preceding twelve-month period.  The new law is effective July 1, 2018.

For more information see Oklahoma’s Economic Report.

Update: On August 31, the Oklahoma Tax Commission has reminded remote sellers that they are required under recently enacted legislation to collect and remit sales or use taxes on all orders if they have taxable sales totaling at least $10,000 delivered into Oklahoma during the previous 12 months, whether or not they have a physical presence in the state.

For more information regarding remote sellers, visit the Oklahoma Tax Commission’s FAQ.

Update: On October 15, the Oklahoma Tax Commission announced that remote sellers can set up a simplified sales tax reporting account through the Oklahoma Taxpayer Access Point website to register for a permit, file returns and make payments to state and local tax jurisdictions online. If they prefer, remote sellers with sales into multiple states may also still to use the Streamlined Sales Tax Registration System (SSTRS).

Remote sellers with sales into the state of at least $10,000 during the previous 12 months are required to collect and remit the state's sales or use tax. Marketplace facilitators and referrers are also required to file an election with the Oklahoma Tax Commission to either collect and remit Oklahoma sales or use tax or to comply with statutory notice and reporting requirements.

Rhode Island

Effective Date 8/17/2017
Highlights
Thresholds Triggering Collection Obligations At least $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

According to a statement issued by the Rhode Island Division of Taxation in response to the Wayfair decision, the state feels it is too early to understand the full impact of the ruling and an internal working group has been formed to assess the possible implications.

Rhode Island already has legislation in place which states a remote retailer is required to collect and remit sales tax to Rhode Island if they have:

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

In addition, for non-collecting retailers, this legislation requires notification to consumers that sales or use tax is due on taxable purchases.

The Rhode Island Division of Taxation also issued an advisory reminding remote sellers of their registration options.

 

Update: On July 23, 2018, the Rhode Island Department of Revenue issued a supplemental statement to clarify its initial notice.

The obligations of non-collecting retailers (including remote sellers) under Rhode Island’s 2017 non-collecting retailer law are not affected by the Supreme Court’s decision in Wayfair. Under Rhode Island’s law, which became effective on August 17, 2017, a non-collecting retailer must exercise one of two options:

  • Register with the Division of Taxation and collect and remit Rhode Island sales/use tax, or
  • Provide notices to consumers as to their Rhode Island sales/use tax obligations.

As the Division previously noted, non-collecting retailers are not affected by the Wayfair decision for Rhode Island sales/use tax purposes under existing Rhode Island law:

  • Non-collecting retailers that have registered and have begun collecting and remitting Rhode Island sales/use tax under the August 2017 law, or that have elected instead to provide notice to consumers in accordance with the August 2017 law, should continue to do so.
  •  Non-collecting retailers that have not elected to either 1.) register with the Division and collect and remit Rhode Island sales/use tax under the August 2017 law, or 2.) provide notice to consumers in accordance with the August 2017 law, should make the election so that they can be in full compliance with Rhode Island’s August 2017 law. Those that fail to comply with the August 2017 law remain subject to the penalties.

South Carolina

Effective Date 11/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000
Transaction Included In Threshold Test Sales of TPP delivered into the state

Following the U.S. Supreme court ruling on South Dakota v. Wayfair, South Carolina lawmakers won’t have to pass new legislation post-Wayfair for the state to begin enforcing online sales tax collections.

According to South Carolina’s Department of Revenue, the statute has not been enforced because of the constitutional nexus restrictions under Quill Corp. v. North Dakota. Guidance from South Carolina regarding remote sellers will be finalized in the “upcoming weeks.”

The South Carolina Department of Revenue plans to implement the same tax thresholds as in South Dakota and exempt sellers with:

  • less than $100,000 in sales; or
  • fewer than 200 transactions into the state per year from collecting and remitting sales taxes.

For more information and updates visit South Carolina’s Department of Revenue’s website.

Update: On August 10, the South Carolina Department of Revenue (DOR) published drafts of three revenue rulings that explain the state’s economic nexus thresholds and other pertinent rules for remote sellers, online marketplace operators and retailers who sell goods through third-party online marketplaces.

Draft Ruling #1:

The first draft ruling clarifies that remote sellers who meet the economic nexus threshold must register to do business in the state and collect and remit South Carolina sales and use tax effective October 1, 2018. It defines a remote seller as a retailer with no physical presence in the state, as well as any entity related to the retailer that helps with sales, storage and distribution of goods, payment collection and other activities that aid in the sales process. A retailer has economic nexus if it has sales of tangible personal property in excess of $250,000 in the previous of current calendar year. Sales include taxable and exempt sales, but do not include sales using a third party online marketplace.

Draft Ruling #2:

The second draft ruling outlines the rules relating to online marketplace operators. The draft ruling defines an online marketplace operator as a retailer engaged in the business of facilitating a retail sale of tangible personal property, which they do by:

  • Listing or advertising, or allowing the listing or advertising of, the products of another person in any marketplace where sales at retail occur; and
  • Collecting or processing payments from the purchaser, either directly or indirectly through an agreement or arrangement with a third party, regardless of whether the online marketplace receives compensation or other consideration in exchange for its services.

The definition also includes any related entity assisting with sales, storage and distribution of goods, payment collection and other sales-related activities. Online marketplaces with physical presence should collect and remit tax as of the date they established a presence. However, under a previously enacted statute, online marketplaces with a distribution facility in the state are not considered to have a physical presence until January 1, 2016.

Online marketplaces with economic nexus as of August 31, 2018 should begin collecting and remitting sales tax as of October 1, 2018. An online marketplace has economic nexus if it has sales of tangible personal property in excess of $250,000 in the previous of current calendar year. Sales include taxable and exempt sales and include both its own sales and sales of property owned by others. If an online marketplace does not have economic nexus as of August 31, 2018, it must begin collecting and remitting tax as of the first day of the second calendar month after crossing the economic nexus threshold.

The ruling also makes note of the pending litigation between the state and Amazon which is expected to take several years to resolve. This ruling refers readers to guidance set forth in the third draft ruling that applies to users of online marketplaces to sell their own goods.

Draft Ruling #3:

In the third draft ruling, which applies to users of online marketplaces to sell their own goods, the state explains that it views the online marketplace as the person responsible for collecting and remitting tax for sales made on its platform. In light of the pending litigation with Amazon, which could take years to resolve, the state recommends that retailers selling via online marketplaces that are not collecting and remitting tax apply for their own retail license and begin collecting and remitting on their own behalf.

Update: An August 21 draft revenue ruling would direct out-of-state retailers with sufficient nexus in South Carolina to collect and remit to the state DOR all applicable local sales and use taxes for each jurisdiction where its products are delivered. In other words, once the economic nexus threshold is crossed for state purposes, it is also deemed to have been crossed for all local jurisdictions and local tax collection should begin for all sales into those jurisdictions.

Update:  On September 20, South Carolina’s Department of Revenue has finalized a new revenue ruling (#18-15) clarifying remote sellers requirements for local jurisdiction tax collection.

The Department of Revenue has taken the position that once a retailer has established nexus with South Carolina for sales and use tax purposes, the retailer has nexus for sales and use tax purposes with every local jurisdiction in the state which the Department administers and collects a local sales and use tax.  Therefore, retailers must remit local sales and use taxes for any local jurisdiction which deliveries are made by, or on behalf of, the retailer.

South Dakota

Effective Date 11/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

Following the South Dakota v. Wayfair decision, South Dakota Governor Dennis Daugaard has called a special legislative session for September 12, 2018 to consider legislation that would expedite implementation of the recent Wayfair ruling and allow the state to enforce the obligation of remote sellers to collect and remit sales tax.

“South Dakota led the fight for tax fairness, which culminated with our historic win before the U.S. Supreme Court in June,” said Daugaard. “Thanks to that victory, other states are implementing tax changes as soon as Oct. 1, and I will be proposing legislation to allow South Dakota to join them.”

A draft of the legislation is currently being prepared by the South Dakota Department of Revenue in consultation with the Attorney General’s office and will be made available for review prior to the special session.

Update: On August 30, South Dakota Governor Dennis Daugaard submitted two pieces of legislation to be considered during the special session beginning September 12 regarding sales tax collection from remote sellers.

S.B. 1 would allow the state to begin collecting sales tax from remote sellers with more than $100,000 in sales or 200 or more transactions starting November 1, 2018, with an exemption for the Wayfair litigants.

S.B. 2 would require marketplace providers to obtain a sales tax license and remit sales tax on behalf of sellers utilizing their services and would apply to websites that host third-party sellers.

Update: On September 12, the South Dakota Legislature passed both pieces of legislation, S.B. 1 and S.B. 2; these bills are now signed into law. The legislation removes the injunction barring the state from implementing their economic nexus statutes while the Wayfair case is pending for all remote sellers except the three defendants in the case.

According to the state’s website, remote sellers that meet the thresholds will be required to collect and remit sales tax beginning November 1, 2018. Marketplace facilitators will have until March 1, 2019 to comply.

Update: On October 2, the South Dakota Department of Revenue issued a bulletin for out-of-state vendors regarding remote sellers and marketplace providers taxation.

Beginning November 1, 2018, South Dakota will require remote sellers to collect and remit sales or use tax on sales of taxable products and services in South Dakota. Beginning March 1, 2019, marketplace providers who meet certain thresholds must obtain a South Dakota sales tax license and pay applicable sales tax. These remote sellers can register to collect and remit South Dakota sales tax if one registers for a South Dakota sales tax license or registers with multiple states through the Streamlined Sales Tax System.

A remote seller is required to collect and remit sales tax if in the previous or current calendar year:

  • gross revenue from sales into South Dakota exceeds $100,000; or
  • 200 or more separate transactions are delivered into the state.

A marketplace provider is also required to remit sales tax on all sales it facilitates into South Dakota if the following thresholds are meet:

  • 200 or more transactions into South Dakota; or
  • $100,000 or more in sales to South Dakota customers.

Update: Following the recently signed legislation, South Dakota issued a fact sheet regarding remote sellers. This fact sheet is designed to provide general guidelines and examples of what is included in a retailer's gross receipts.

Update: On October 31, South Dakota entered into a final settlement agreement and stipulation of dismissal in State of South Dakota v. Wayfair, Overstock and Newegg. This final settlement agreement brings a conclusion to all remaining issues not addressed by the United States Supreme Court.

Under the term of the settlement, beginning January 1, 2019, South Dakota will require Wayfair, Overstock and Newegg to collect and remit sales or use tax on sales of taxable products and services in South Dakota.

Tennessee

Effective Date In Review
Highlights
Thresholds Triggering Collection Obligations --
Transaction Included In Threshold Test --

Following the South Dakota v. Wayfair decision, the Tennessee Department of Revenue issued a notice explaining that remote sellers are not required to collect Tennessee sales and use tax until additional guidance is issued to the public.

As stated in Important Notices 17-01 and 17-12, Tennessee has established an economic nexus rule, Rule 129(2), but because of subsequently enacted legislation, it cannot be enforced until the Tennessee General Assembly conducts a review of the Wayfair decision.

According to the notices, if a dealer has no physical presence in Tennessee, the it is not required to collect Tennessee sales and use tax until the Department issues public notice stating the specific date and circumstances under which such dealers must begin to collect and remit the tax. However, the Department encourages these dealers to voluntarily collect and remit the tax.

For more information and updates please visit The Tennessee Department of Revenue’s website.

Texas

Effective Date Proposed
Highlights
Thresholds Triggering Collection Obligations At least $500,000
Transaction Included In Threshold Test Sales of TPP delivered into the state

Following the U.S. Supreme Court’s South Dakota v. Wayfair ruling, the Texas Comptroller of Public Accounts announced it will begin reviewing current regulations, but assured it would not retroactively apply the new law to remote sellers. In its announcement, the Comptroller said it would be working with Texas citizens and businesses to determine how to implement the principles. Amendments are not expected until early 2019, however, that could change pending issues that arise during the rulemaking process. It also stated that retroactivity will not be considered.

Texas Rule 3.286 outlines that out-of-state retailers that do not meet physical presence criteria are not required to collect Texas tax, but can do so on a voluntary basis. Texas adopted affiliate nexus rules in 2011.

To stay up to date with the latest decisions by the Texas Comptroller of Public Accounts, visit its news center.

Update: On September 6, the Texas Comptroller released draft regulations that include a $500,000 safe harbor threshold for remote sellers. The draft was sent for comment to the comptroller’s taxpayer advisory group and business advisory group. The regulation would be applied prospectively on January 1, 2019. However, permitting and collection requirements for remote sellers would be postponed until October 1, 2019, “to provide additional time for remote sellers to prepare for their collection and reporting obligations.”

Collection obligations would not be imposed for remote sellers whose gross revenue from the sale of tangible personal property and services for storage, use, or other consumption in Texas is below a safe harbor amount of $500,000 for the prior 12 months.

Utah

Effective Date 1/1/2019
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

Following the U.S. Supreme court ruling on South Dakota v. Wayfair, Utah lawmakers, in a special legislative session, passed revised remote seller legislation.

In S.B. 2001, a bill that modifies sales and use tax provisions, signed by the governor on July 21, Utah mirrored the same tax thresholds as South Dakota and exempted remote sellers with:

  • less than $100,000 in sales; or
  • fewer than 200 transactions into the state per year from collecting and remitting sales taxes.

The legislation also repealed a previous provision allowing remote sellers that voluntarily collect and remit sales and use tax to keep 18 percent of the amount that would otherwise be remitted. In addition, the new legislation created a three-year sales tax exemption for certain machinery and equipment.

For more information, visit the Utah State Tax Commission’s website.

Update: On October 25, the Utah State Tax Commission reminded sellers about the new law imposing Utah sales and use tax collection and remittance responsibilities, effective January 1, 2019, to those selling tangible personal property, products transferred electronically, or services for storage, use, or consumption in Utah who, in either the previous or current calendar year had:

  • more than $100,000 in sales; or
  • 200 or more separate transactions into the state per year from collecting and remitting sales taxes.

The Commission also reminds sellers that, effective January 1, 2019, this new law removes a statutory provision from state law which has allowed remote sellers choosing to voluntarily pay such taxes to retain 18 percent of the amount they would ordinarily remit.

Vermont

Effective Date 7/1/2018
Highlights
Thresholds Triggering Collection Obligations At least $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

The recent Supreme Court decision in South Dakota v. Wayfair has made Vermont’s remote seller provisions of Act 134 of 2016 effective July 1, 2018. Out-of-state vendors making sales into Vermont must register and collect sales tax if, during any preceding 12-month period, they have:

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

The law provides that vendors who sell tangible personal property from outside Vermont who do not maintain a physical presence in the state are subject to the collection requirements if they engage in regular, systematic, or seasonal solicitation of sales of such property in the state through:

  • the display of advertisements;
  • the distribution of catalogues, periodicals, advertising flyers, or other advertising by means of print, radio, or television media; or
  • the use of mail, Internet, telephone, computer database, cable, optic, cellular, or other communication systems, for the purpose of effecting sales.

To read The Vermont Department of Taxes announcement, click here.

Washington

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations At least $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Retail sales of TPP delivered into the state

A statement on the Washington State Department of Revenue website announces that the department is aware of the Supreme Court’s decision to overturn Quill Corp v. North Dakota and will consider its implications to determine next steps.

Prior to the Wayfair ruling, Washington had already made similar updates to sales and use tax requirements for out-of-state sellers. Beginning on January 1, 2018, the state introduced new sales and use tax obligations for marketplace facilitators, remote sellers and referrers. Out-of-state retailers making $10,000 or more in retail sales from consumers in Washington are required to collect and remit sales and use tax or provide a “conspicuous notice” at the time of the sales that use tax may be due on the purchase.

Details are available on the Department of Revenue’s website.

Update: On August 3, 2018, the Washington Department of Revenue issued guidance for out-of-state vendors.  

Effective January 1, 2018, remote sellers and marketplace facilitators with more than $10,000 in retail sales into Washington must either register and collect sales tax on all taxable sales or follow the use tax notice and reporting requirements.

Effective October 1, 2018, remote sellers and marketplace facilitators are required to collect and remit sales tax on all taxable retail sales into Washington if the seller meets either or both of the following conditions in the previous calendar year or the current calendar year:  

  • it has gross revenue from sales exceeding $100,000; or
  • it has 200 or more separate transactions into Washington.

As of October 1, 2018, once a business exceeds the $100,000 in retail sales or 200 transactions threshold, the business no longer has a choice and must register and collect retail sales/use tax.

Update: The Washington Department of Revenue requires remote sellers to collect sales or use tax on taxable sales sourced to Washington if they exceed $100,000 in gross retail sales or have 200 or more retail transactions in the state in the current or prior calendar year. On October 5, the Department issued amended rules on interstate sales and the collection of use tax to warn taxpayers that the rules may contain outdated guidance. Taxpayers should consult the department’s website for all current information.

Update: On October 11, the Washington Department of Revenue discussed sales tax thresholds for out-of-state businesses in a Tax Topics Publication. As of October 1, 2018, the Department of Revenue requires businesses that do not have a physical presence in Washington to collect sales or use tax on taxable retail sales if they exceed $100,000 in gross retail sales or have 200 or more retail transactions sourced to the state during the previous or current calendar year. To determine when a sale took place, the date of the sale could be based on the invoice date, date the product is shipped, date the product is delivered or received or the date payment is received. Businesses can use any of the above dates, as long as doing so does not distort or manipulate sales.

West Virginia

Effective Date 1/1/2019
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP and services delivered into the state

On October 1, 2018, following the South Dakota v. Wayfair decision, West Virginia issued an Administrative Notice providing economic nexus thresholds for sales and use tax in the state.

Effective January 1, 2019, remote sellers are required to collect and remit sales and use tax on all taxable retail sales into West Virginia if the seller meets either or both of the following conditions in the previous calendar year or the current calendar year:

  • Delivered more than $100,000 of goods or services into the state; or
  • Engaged in 200 of more sperate transactions into West Virginia.

The state’s website now has information on these new remote seller requirements.

Wisconsin

Effective Date 10/1/2018
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP and services delivered into the state

The United States Supreme Court recently ruled in South Dakota v. Wayfair that a state can require out-of-state sellers without a physical presence in that state (i.e., remote sellers) to collect and remit sales or use tax on sales delivered into that state. On July 5, 2018, the Wisconsin Department of Revenue released a notice in response to the decision.

The notice stated that:

  • Beginning October 1, 2018, Wisconsin will require remote sellers to collect and remit sales or use tax on sales of taxable products and services in Wisconsin. Wisconsin statute requires all sellers to collect sales or use tax unless limited by federal law.
  • New standards for administering sales tax laws on remote sellers will be developed by rule. The rule will be consistent with the Court's decision in Wayfair, which approved a small seller exception for sellers who do not have annual sales of products and services into the state of:
    • more than $100,000; or
    • 200 or more separate transactions.

Note: Any small seller exception adopted will not apply to sellers with a physical presence in Wisconsin.

Update: The Wisconsin Department of Revenue issued an emergency remote seller regulation on September 6. Effective October 1, the regulation repeals and re-creates Wisconsin Administrative Code section Tax 11.97, which contains sales and use tax provisions for out-of-state retailers without a physical presence in Wisconsin.  Simultaneously, the department proposed a permanent rule and will be accepting comments until October 10, 2018.

Wisconsin’s remote seller regulation states that a remote seller must collect and remit sales tax to the state if they:

  • sell more than $100,000 in products and/or services; or
  • 200 or more separate sales transactions in the state.

The DOR has announced that remote sales tax collection will begin October 1. For more information and updates, please visit Wisconsin’s Department of Revenue Services.

Update: On November 11, the Wisconsin Department of Revenue issued a proposed permanent administrative rule that sets forth new economic nexus standards for remote sellers. Consistent with Wayfair, the rule includes a small seller exception for remote sellers that do not have annual sales into Wisconsin of more than $100,000 or 200 or more separate transactions.

Wyoming

Effective Date TBD
Highlights
Thresholds Triggering Collection Obligations More than $100,000 or 200 or more separate sales transactions
Transaction Included In Threshold Test Sales of TPP delivered into the state

Following the South Dakota v. Wayfair decision, The Wyoming Department of Revenue issued guidance for out-of-state vendors. Although Wyoming does not currently require remote sellers to license with the state to collect and remit sales tax, it does have nexus statutes identical to South Dakota’s. The thresholds for economic nexus in Wyoming are either 200 sales transactions or $100,000 in sales annually.

Businesses wishing to voluntarily license in Wyoming may begin that process any time. The Department is reviewing the potential for a licensing deadline and will post information on their website when a date has been established.

* This information is provided solely for educational purposes, without any warranty as to the accuracy or completeness of the information included in this table. This data is not intended to and does not constitute tax advice or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.

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