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SCOTUS rules on South Dakota v. Wayfair

News | , , , |

On June 21, 2018, the U.S. Supreme Court rendered its decision of South Dakota v. Wayfair, Inc concerning whether or not South Dakota’s new economic nexus standard for collecting and remitting sales tax is constitutional.

In a 5-4 decision, the court sided with South Dakota. The court determined that in today’s environment of interstate sales via electronic channels, particularly from internet vendors, it is appropriate to let states require out of state vendors to collect and remit sales tax despite having no physical presence in the taxing state.

Since 2015, more than 20 states including Iowa and Illinois have passed similar legislation (see below).  With today’s ruling, we expect more states to pass similar laws.

Businesses selling tangible personal property into states where they do not have physical presence should be advised this ruling is very likely to affect them and require them to register and collect sales tax.

Contact your account manager or call 888-556-0123 if you have questions regarding this news.

The states with presently enacted economic nexus standards as well as their thresholds are as follows:

  • Alabama – $250,000 sales per year based on the previous calendar year’s sales
  • Iowa – $100,000 of sales per previous calendar year OR has 200 or more separate transactions (Law takes effect in 2019)
  • Illinois – $100,000 of sales per previous calendar year OR has 200 or more separate transactions
  • Indiana – $100,000 of sales per previous calendar year OR has 200 or more separate transactions
  • Maine – $100,000 of sales per previous calendar year OR has 200 or more separate transactions
  • Massachusetts – $500,000 of sales per previous calendar year OR has 100 or more separate transactions
  • Mississippi – $250,000 in the prior twelve months
  • North Dakota – $100,000 of sales per previous calendar year OR has 200 or more separate transactions
  • Ohio – $500,000 of sales in the current or preceding calendar year
  • Oklahoma – $10,000 of sales in the previous 12 months
  • Pennsylvania – $10,000 of sales in the previous 12 months
  • Rhode Island – $100,000 of sales per previous calendar year OR has 200 or more separate transactions
  • South Dakota – $100,000 of sales per previous calendar year OR has 200 or more separate transactions
  • Tennessee – $500,000 of sales in the previous 12 months
  • Vermont – $100,000 of sales per previous calendar year OR has 200 or more separate transactions
  • Washington – $10,000 of sales in the previous 12 months
  • Wyoming – $100,000 of sales per previous calendar year OR has 200 or more separate transactions