In the case of South Dakota vs Wayfair, the Supreme Court has sided with South Dakota and set precedent that sales tax may be collected from online purchases. This case challenged the “physical presence standard” to establish Nexus. Historically, nexus had been linked to physical presence. With the rise of online sales, many states have expanded the definition of nexus beyond the physical presence of brick and mortar.
Many states are getting on board with “economic” nexus laws and putting pressure on marketplace sellers to collect sales taxes. The States vary in their new rules – some States are charging sales taxes on internet sales over $100,000 or 200 invoices, others set the sales at $10,000. Economic nexus laws target companies who sell remotely direct to customers. In addition, there are new requirements for reporting use tax and this too is spreading across the US (Colorado has some very strict requirements on Use Tax Reporting).
Sales taxes are becoming a very complex issue. Bronswick Benjamin has many clients affected by changes in the sales tax laws, so we make sure our team stays versed on any changes. If you’d like to learn more about how this decision may impact your business, contact a Bronswick Benjamin professional today.