The U.S. Supreme Court has issued its highly anticipated decision in South Dakota v. Wayfair, overruling Quill’s physical presence sales tax nexus standard. This decision will have significant implications for almost all industries, but especially consumer products (retailers) and industrial products.
With a new sales tax nexus standard established, more states will require all retailers that sell within their borders to collect that state’s sales tax. About a dozen states have already addressed economic nexus laws or regulations.
The Wayfair case moved through the court system at a blistering pace. Even with a decision from the nation’s highest court, very little is settled. Under the U.S. Constitution, Congress may have the authority to implement a remote seller solution or codify the physical presence standard into federal law. Whether Congress takes up the issue is a “wait-and-see” proposition.
However, Wayfair has created many more questions than answers. Adapting your business to the new sales and use tax landscape will take time, even though you may need to react quickly.
Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
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