Businesses who sell over the internet must pay a lot of attention to far-flung economic tax thresholds – all states with a statewide sales tax and more than a few localities enforce them now – so it’s easy to overlook a more obvious tripwire like physical presence.

It’s been five years since the U.S. Supreme Court’s Wayfair decision gave tax jurisdictions the power to require out-of-state companies collect and remit sales tax. Those governments jumped on the chance of such revenue and continue to do so.

Two recent state courts’ determinations – one good for the seller, one not – show the continuing reach of Wayfair almost five years after the landmark Supreme Court decision regarding economic nexus.

What a 48 months it’s been.

A bill to enact economic nexus requirements – creating a sales and use tax obligation on remote sellers and marketplace facilitators – awaits only a signature to become law in Missouri.

June 21 marked three years since the landmark decision in the South Dakota v. Wayfair case. The years since June 2018 have been unlike anything in the history of sales tax.

Sales tax compliance is complex, there’s no doubting it. While many hoped that the Supreme Court decision in South Dakota vs. Wayfair would make things more clear, it did quite the opposite.

States are still reeling in sales tax deficits brought on by the economic downturn during the pandemic, but the addition of economic nexus has appeared to have somewhat alleviated the deficits. States are starting to see an increase in online sales tax collections as more and more people remain online for work and shopping. 

If your business has been struggling to comply with new sales and use tax laws, Congress is listening.

Sales and use tax nexus has become a major headache for any business that sells into the United States. But what exactly is nexus for sales and use tax purposes, and where does it come from, anyway?

Sales and use tax nexus is a connection between a person or entity and a taxing jurisdiction.  Sales tax nexus is the basis for all your sales tax decisions because without sales tax nexus you have no further obligation to a state.  If you do have sales tax nexus, then you need to dig a bit deeper.  But what exactly defines when you have sales tax nexus?

Why would states go through all the trouble of enacting economic nexus to grow their tax coffers and then ease off on the restrictions - especially big states like New York and California, which were once expected to garner nine and even ten figures in tax revenue from nexus legislation?

In the 17 months since the South Dakota vs Wayfair decision, some states have begun reporting their revenues against predicted numbers. Among the first are South Carolina, Iowa and Massachusetts – and results are mixed.

The American Catalog Mailers Association has released results of their survey regarding how remote retailers of all sizes were affected by the South Dakota v. Wayfair Inc. decision.

States predicted minimal harm to direct/online retailers from this decision but the survey results claim a different story: