Supreme Court overturns Quill, subjects all internet transactions to sales tax

[TaxMechanick]

It does not appear to me that every small retailer, with limited sales in most jurisdictions, will necessarily be burdened with having to collect and remit sales tax in all jurisdictions. It appears to me that the Wayfair decision serves to support an "economic" nexus standard already employed by many jurisdictions, and potentially now to be employed by many more. This economic standard is often based on a minimal $ amount or based on # of transactions in a given year. For example, North Dakota (Wayfair case) employs a minimal $ amount of $100,000 of economic sales in the state. So, the threshold is and would be measured jurisdiction by jurisdiction.

Prior to this decision, the Quill case had supported the long standing Hess case decision that there must be some sort of "physical presence" in a jurisdiction (state or local) in order for that jurisdiction to force a seller to collect and remit sales tax as a defined "retailer." The Wayfair decision reverses that exclusive requirement of physical nexus, and gives jurisdictions the ability (by Supreme Court "National" applicability) to employ minimal economic nexus standards.

[Brian Van Horn]

Originally Posted by TaxMechanick

It does not appear to me that every small retailer, with limited sales in most jurisdictions, will necessarily be burdened with having to collect and remit sales tax in all jurisdictions. It appears to me that the Wayfair decision serves to support an "economic" nexus standard already employed by many jurisdictions, and potentially now to be employed by many more. This economic standard is often based on a minimal $ amount or based on # of transactions in a given year. For example, North Dakota (Wayfair case) employs a minimal $ amount of $100,000 of economic sales in the state. So, the threshold is and would be measured jurisdiction by jurisdiction.

Prior to this decision, the Quill case had supported the long standing Hess case decision that there must be some sort of "physical presence" in a jurisdiction (state or local) in order for that jurisdiction to force a seller to collect and remit sales tax as a defined "retailer." The Wayfair decision reverses that exclusive requirement of physical nexus, and gives jurisdictions the ability (by Supreme Court "National" applicability) to employ minimal economic nexus standards.

"So, the threshold is and would be measured jurisdiction by jurisdiction." That is where it gets messy.

[TaxMechanick]

Brian, yes indeed! Some jurisdictions have a much lower threshold than the ND $100,000 threshold. Here's something I located online for states with "current" thresholds...$10,000 is lowest $ threshold (i.e. PA and Washington State), $500,000 is the highest. Some states base it on # transactions.

https://blog.taxjar.com/economic-nexus-laws/

Obviously, the Wayfair decision opens it up for jurisdictions that employ current standards to consider new economic and marketplace thresholds, as well as additional jurisdictions employing new such standards.

Glenn