Navigating Sales and Use Taxes in a Post-Wayfair World
Last year’s Supreme Court holding in Wayfair, which allows a state to impose tax obligations on businesses solely on the basis of economic activity rather than physical presence in that state, has dramatically and in many cases unexpectedly increased the sales and use tax compliance obligations of companies doing business around the country.
Right now, 40 states and DC have some form of “economic nexus” and by the end of 2019/early 2020, all remaining states will likely implement Wayfair.
This means that businesses will face more complex requirements in more states, increasing the cost of doing business and risk. Key new business obligations are:
• Obligation to register
• Keep detailed records
• Collect and remit sales and use taxes in many states where they don’t have a physical presence
• Businesses affected – online, brick-and-mortar, wholesale, manufacturing, distribution, construction and others
How has that decision affected your business currently and what steps have you taken to respond to this increased risk of compliance obligations?