SALT Nexus Wayfair Ruling

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

For Additional Information:

For additional information on the Wayfair decision and its impact on doing business, please consult your tax advisor or our members of our experienced State & Local Tax team:

Giles Sutton | State & Local Tax Partner | 901-684-5654 | giles.sutton@dhg.com

Tommy Varnell | Senior Manager | 404-575-8859 | tommy.varnell@dhg.com

Will Lowe | Senior Manager | 980-729-7416 | will.lowe@dhg.com

Bill Poad | Senior Manager | 703-970-0476 | bill.poad@dhg.com

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