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.

Things affected by the Wayfair ruling

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 
Effective date for Economic Nexus by state.

Upcoming Events

Federal and State Tax Update (Birmingham, AL)
Conference | May 03, 2019 7:30 AM - 2:00 PM | CPE: 4 | Topgolf Birmingham
More About | Birmingham, AL | State & Local Tax | Tax Reform | SALT Nexus

Join DHG for our 2019 Federal & State Tax Update. This half-day CPE session will focus on the trends and issues you need to know! The event is complimentary, and you can earn up to 4 hours of CPE credit, upon approval. Following the forum, you’ll have an opportunity to connect one-on-one with our team, along with lunch and golf.

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Knowledge Share

The Wayfair Ruling’s Impact on Financial Reporting
Publication | Nov 09, 2018
More About | Assurance | SALT Nexus | Performance & Growth | Risk & Regulatory

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.

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Compliance in the Post-Wayfair World: What’s Next?
alert | Aug 06, 2018
More About | Tax | State & Local Tax | SALT Nexus | Performance & Growth | Risk & Regulatory

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.

Read More

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