SALT Nexus Impact of the Wayfair Ruling

The U.S. Supreme Court’s 5-4 decision, June 21, 2018, in South Dakota v. Wayfair, Inc., U.S. Supreme Court Case No. 17-494, (herein referred to as “Wayfair” or the “ruling”) will have a significant impact on U.S. multi-state businesses. The Court’s Justices ruled in favor of South Dakota, overruling the Court’s previous decision in both Quill Corp. v. North Dakota, 504 U.S. 298 (1992) and National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753 (1967), which placed an increased sales tax compliance burden on businesses with multi-state operations.

In its decision, the Court concluded that South Dakota’s law was not overreaching and pointed to several aspects of the State’s law in supporting its position. As a result of the Wayfair ruling, other states will need to consider whether their laws (or soon to be proposed laws) will fall within the parameters of the Court’s decision.

The Court’s decision will have a significant impact on businesses across many industries that sell products or services in multiple states. Although e-commerce is first-of-mind with this ruling, its decision will affect many more industries, businesses and customers, including, but not limited to:

Brick and mortar stores shipping to customers with locations in other states
Manufacturing, distribution and construction companies who buy, sell or provide services to clients in multiple states
Software vendors, including SaaS companies, issuing licenses in states where they are not registered
Health care providers or insurers
Professional services

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Texas Adopts $500,000 Gross Receipts Franchise Tax Economic Nexus Threshold

On Dec. 20, 2019, the state of Texas amended its franchise “margin” tax nexus rule (34 TAC Section 3.586) to assert that Texas franchise tax economic nexus for foreign corporations is established by exceeding the brightline threshold of $500,000 of sales into the state. The amendment relies upon the Supreme Court’s 2018 Wayfair decision by asserting that constitutional nexus may be created without physical presence.

Wayfair and the Impact on Technology Companies

Publication | Mar 11, 2019
More About | Technology & Life Sciences | State & Local Tax | SALT Nexus

With the vast changes in sales tax requirements among states due to the impact of Wayfair, technology companies should consider how this will apply to them. The summary below discusses how this could impact businesses throughout the U.S. Some of the issues most applicable to the technology industry include:

Wayfair and the Impact on Manufacturers and Distributors

With the vast changes in sales tax requirements among states due to the impact of Wayfair, manufacturers should consider how this will apply to them. The summary below discusses how this could impact businesses throughout the U.S. Some of the issues most applicable to the manufacturing industry include:

Wayfair and the Impact on Private Equity

Publication | Feb 05, 2019
More About | Private Equity | SALT Nexus

With the vast changes in sales tax requirements among states due to the impact of Wayfair, private equity firms should consider how this will apply to them. The summary below discusses how this co

Wayfair and the Impact on Automotive Dealers

With the vast changes in sales tax requirements among states due to the impact of Wayfair, dealerships should consider how this will apply to them. The summary below discusses how this could impact businesses throughout the U.S. Some of the issues most applicable to the automotive dealership industry.

2018 Year End Tax Planning Letter

It is hard to believe that the year is almost over, and the holiday season is upon us. As you put the finishing touches on your year-end plans remember to include a plan for taxes this year.

The Wayfair Ruling’s Impact on Financial Reporting

In arguably the most important sales tax case in the past twenty-five years, the U.S. Supreme Court released its highly anticipated decision in South Dakota v. Wayfair, Inc. in June. In essence, the Wayfair decision eliminated the historical “physical presence” nexus standard for sales tax and effectively puts into place an “economic” nexus standard based on the amount of business a company does in a given jurisdiction. The court upheld South Dakota’s nexus statute, which defines doing business in the state as having greater than $100K in sales or 200 transactions in a year within the state.

Compliance in the Post-Wayfair World: What’s Next?

In arguably the most important sales tax case in the past 25 years, the U.S. Supreme Court announced its highly anticipated decision in South Dakota v. Wayfair, Inc. In summary, the Wayfair decision eliminated the historical “physical presence” standard and effectively put in place an “economic nexus” standard based on the amount of business a company does in a given jurisdiction.

Sales Tax Nexus – Highly Anticipated Decision in Wayfair Case is Announced

In arguably the most important sales tax case in the past twenty five years, the U.S. Supreme Court has announced its highly

Ohio Supreme Court Decisions Give Greater Weight to the Factor Presence Nexus Standard

The Ohio Supreme Court recently reached similar decisions in three cases, Crutchfield1, Mason2, and NewEgg3, whereby taxpayers were challenging the state's factor presence nexus standard.

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Wayfair’s Impact on States’ View of Nexus & Potential Sales Tax Burden on Technology Companies

The South Dakota vs Wayfair ruling leaves many companies with a greater sales tax compliance burden and can impact both sales and purchases. With each state’s requirements varying widely, technology companies will need to dedicate more time and resources to meet states’ taxability and reporting requirements.

Top Issues Affecting Private Companies

Join DHG Assurance, Tax & Advisory professionals on January 9th as we discuss top issues affecting private companies. We’ll facilitate an interactive conversation to discuss the impacts of recently released guidance from FASB and the IRS.

Wayfair – The Impact on Manufacturers

The recent South Dakota vs Wayfair ruling will leave companies with a greater sales tax compliance burden and can impact both sales and purchases.