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Supreme Court Ruling Allows States To Collect Sales Taxes Without Physical Presence

On Thursday, June 21, 2018, the Supreme Court of the United States ruled in favor of South Dakota in the case of South Dakota v. Wayfair, Inc. The impact of this ruling is to remove the requirement that a company must have a physical presence in a state to be required to collect sales or use tax.

The standard for collection will now shift to collecting tax from those with a substantial nexus in a state, which can be established through a substantial economic presence. It remains to be seen as to what level of economic activity will constitute a substantial presence. The definition of substantial economic presence will revolve around the laws of individual states and future court decisions.

We will keep you up to date as developments and guidance are released.

In the meantime, if you have questions, please contact your local Blue & Co. advisor.

 

Tax Reform Resource Center
 

 

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