Wayfair Tax Changes

Posted on // Best Practices, Tips and Tricks

South Dakota v. Wayfair, Inc. brings new sales tax rules for remote sellers. The Supreme Court overturned its ruling in "Quill Corp. v. North Dakota2 (Quill), which had interpreted the “substantial nexus” requirement of the dormant Commerce Clause jurisprudence as requiring a “physical presence” (i.e., offices, branches, warehouses, employees, and activities of independent contractors) in a state in order for a state to impose a sales tax collection requirement on sellers."  This means that even if your website doesn't have a physical location, you'll need to understand tax laws dependng on where your site ships products. Source

"The US Supreme Court’s June 2018 ruling in Wayfair, Inc. et al.1 (Wayfair) has shifted the ground under online retailers, consumers, and state tax authorities across the country."  Source

If your site is an e-commerce site, regardless of selling services or products, you'll want to be familiar with these changes.  For a state-by-state guide to sales tax economic nexus rules, use this resouce from Alavara.  

As always, we recommend talking to your tax professional to fully understand how this impacts your business.