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Cookies, clicks and Wayfair: Why economic nexus started

TaxConnex

Something about those Dakotas … The Wayfair case of some six years ago saw three internet-sales companies – home goods and furnishings vendors Wayfair and Overstock and electronics vendor Newegg – challenged by the state of South Dakota to be mandated to collect and remit sales tax on the vendors’ large numbers of sales into the state.

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Sales tax and accounting services

TaxConnex

South Dakota taxes accounting services and might be a model for how states could tax this service in the future. Accounting services – which in general are increasingly delivered online with diminishing concern for state borders – are subject to South Dakota sales tax, plus applicable municipal sales tax, with sourcing rules.

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Transaction Thresholds: Vanishing Acts?

TaxConnex

A matter of numbers South Dakota – center of the Wayfair decision – recently eliminated its 200-transaction threshold; only those selling $100,000 or more into the state will be required to register, collect and remit sales tax. At least some states that initially instituted them are now axing transaction thresholds.

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Do you really understand economic nexus for sales tax?

TaxConnex

The decision stemmed from a South Dakota law of 2016 requiring any out-of-state business to collect sales tax in South Dakota if they had generated more than $100,000 in gross sales or had more than 200 sales into the state within a year.

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Multi-channel selling sales tax: Direct/retail sales

TaxConnex

Economic nexus has emerged as a burning issue for many online retailers since the 2018 decision of South Dakota vs. Wayfair , in which the U.S. Supreme Court ruled that the state of South Dakota could require businesses with no physical presence in the state to collect sales tax.

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When do I have to start collecting out of state sales tax? Part 1

TaxConnex

South Dakota v. The provisions of Wayfair allowed South Dakota to compel businesses with at least $100,000 in gross revenue sourced to the state of South Dakota to collect the applicable sales tax. Supreme Court decided in? Wayfair, Inc. States’ individual thresholds varied from the start, and still do.

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States ease nexus thresholds

TaxConnex

South Dakota – center of the Supreme Court’s landmark decision in 2018 – recently eliminated its economic nexus transaction threshold. As of July 1, South Dakota is removing the 200-transaction threshold; only those selling $100,000 or more into the state will be required to register and collect and remit sales tax.