When New York first passed its law defining what constitutes a “vendor” subject to collecting sales tax in the 1980’s, the idea of online shopping sounded like science fiction. In retrospect, NY may have effectively enacted the first “economic nexus” law when they drafted their definition of “vendor” to include a person who regularly or […]
South Dakota vs. Wayfair – Answers to Your Online Sales Tax Questions
Last Tuesday, the Supreme Court heard oral arguments in South Dakota vs. Wayfair which challenges a precedent most recently articulated in the 1992 case of Quill vs. North Dakota. Quill affirmed that a business must be physically present (loosely defined as people or property) in a state before it can be compelled to collect and remit sales and use tax in connection with mail order or internet sales made to its residents.
In the digital age, states have increasingly come to view the physical presence standard as an anachronism, whose continued existence stymies their ability to fund their government. South Dakota contend they are losing millions of dollars in sales tax revenue every year under Quill and researchers estimate $34 billion in revenues lost nationwide. Without a doubt, there are some compelling arguments favoring an overturn.
South Dakota vs. Wayfair Oral Arguments – Insights to Glean
So what’s top of mind for the Justices? Based on their questions asked last Tuesday, the national impact of an overturn is clearly being considered as opposed to focusing exclusively on what would happen in South Dakota. The possibility of states retroactively pursuing sellers for back taxes, and the burden/benefit to small sellers is also top of mind.
Will states find themselves in a situation where they’d be able to enact a rule that imposes collection obligation on a seller based on a single sale, or will they be weighing their options on how to expand collection responsibilities within the confines of Quill? How might a decision this summer impact governments and businesses, and what should each be doing to prepare? Find out this and more, take action below!
Join us on April 27th at 12:00 ET for a live Q&A interview with Chuck Maniace, Director of Regulatory Analysis at Sovos, about what the SD vs. Wayfair Court decision could mean for the future of sales tax and what it could mean for your business. Chuck is a lawyer by trade but promises to keep the legal jargon to a minimum in answering a few key questions, and addressing your specific concerns. Bring your questions! Save Your Seat.
With recent enforcement measures, the IRS has offered definitive proof that the Affordable Care Act (ACA) is still alive and that the agency plans to strictly enforce ACA reporting. Last spring, the agency issued Letter 226J to Applicable Large Employers (ALEs) that failed to cover 95 percent of employees. ALEs are companies with 50 or […]
UPDATE (Jan. 8): Reporting season is moving forward according to plan. The IRS has announced that it will process tax returns on schedule and without delays. While the agency will clarify its contingency plan in the coming days, organizations should proceed as planned with 1099 reporting and other seasonal filings. The IRS will recall a […]
The South Dakota v. Wayfair decision last June has created a lot of angst for indirect tax professionals and the businesses they work so hard to protect from the burdens of sales and use tax filing. Six months later as we begin the new year, that angst has not gotten any lighter. Any federal legislative […]
2018 was a volatile year in indirect tax compliance for tax, finance and IT professionals worldwide. With an increase in globalization and tax gaps surpassing tens of billions in some countries, it’s not surprising that one of the biggest challenges governments are addressing is revenue collection. Like enterprises, governments are creating new, technology-driven processes to […]