As discussed in our newsletter http://www.kyjcpa.com/news-updates/supreme_court_overturns_quill/ in Wayfair, the U.S. Supreme Court overruled the physical presence nexus standard in requiring remote sellers to collect sales tax. Following the Wayfair, many states have adopted or are in process of adopting law that would require out-of-state retailers to collect sales taxes on their in-state sales without regard to physical presence in the state.
Effective October 1, 2018, remote sellers making sales to the following states are required to collect sales tax if they meet the state’s economic nexus threshold:
- Alabama
- Illinois
- Indiana
- Kentucky
- Maryland
- Michigan
- Minnesota
- New Jersey
- North Dakota
- Washington State
- Wisconsin
We expect more states will adopt or amend sales tax nexus standard in response to the Wayfair case. Multi-state retailers are recommended to assess its in-state footprint and assess the compliance requirement, and closely monitor legislative changes and current statutes.