In the wake of the U.S. Supreme Court’s landmark South Dakota vs. Wayfair ruling in June, much uncertainty remains among retailers and ecommerce merchants as to the impact and implications.
What will states do to create tax rules in line with the court’s decision, and when will they act? How soon will they begin requiring tax collection from out-of-state online sellers?
The overturning of the 1994 Quill ruling from SCOTUS is a game-changer in the world of retail and ecommerce. Companies with physical stores say the playing field has finally been leveled in terms of tax nexus. But Chief Justice John Roberts’s dissenting opinion raises valid points about the complexity of imposing and enforce sales tax collection across multiple jurisdictions, and the difficulty of compliance for smaller players.
While South Dakota vs. Wayfair did not codify that state’s annual threshold of $100,000 in sales value or 200 transactions that triggers nexus for remote sellers, it was held up as an exemplar in the ruling. However, that threshold will be much easier for merchants to reach in more populous states such as New York or California.
“One of the reasons why the Supreme Court liked the thresholds in the South Dakota statute is because they’re preventing (the state) from capturing a lot of smaller businesses,” said Nancy Manzano, Director of the Chief Tax Office at Vertex Inc., a provider of tax software solutions for businesses. “In order to get to $100,000 in receipts in a state like South Dakota, you have to be a big retailer. So, the question becomes, is that threshold good enough to protect small sellers in more populous states?”
To address this and many other questions raised by South Dakota vs. Wayfair, join Multichannel Merchant next Wednesday, July 18 at 1 p.m. EDT for “The Supreme Court Wayfair Decision: Now What?” This informative webinar will explore how the decision impacts the ecommerce industry and what you need to do in response.
Joining Manzano on the panel will be two other tax experts from Vertex: Michael Bernard, Chief Tax Officer, Transaction Taxes and Mark Sieczkowski, Senior Product Manager. Sign up today to gain a better understanding that will help you navigate the broader implications of the post-Quill world.