Welcome to the New E-Commerce World Order
Prior to last week, according to the 1992 case Quill Corp. v. North Dakota, physical presence was required in a state for that state to be able to mandate a retailer collect and remit sales tax. Last Thursday, June 21, the U.S. Supreme Court overturned the “Quill” case. The new ruling (South Dakota v. Wayfair, Inc.) determined that physical presence is no longer required in a state for that state to require out of state retailers to collect and remit sales tax. This ruling paves the way for states to tax interstate sales made to customers within their state. Accordingly, online retailers of all types MAY have to register, collect and remit sales tax and file sales tax returns in each state in which they make sales. (Note: physical presence is still required for income tax).
Several states have already passed legislation in advance of the Wayfair ruling, setting thresholds under which out of state retailers would be required to collect and remit sales tax. In the upcoming weeks and months, we will be monitoring each state’s progress with regard to new legislation, thresholds and effective dates.
Please make sure to speak with us regarding the states in which you are conducting e-commerce business and sales. We will work with you to address the issue of sales tax on a state by state basis.
For additional information on this ruling and how it will affect your business, or how you file your state sales tax returns, contact Patricia Giunta at patricia.giunta (at) jtshulman (dot) com.