In a recent article published in Retail Merchandiser, Bennett Thrasher partner Peter Stathopoulos discusses the bright-line physical presence test of sales tax nexus in Quill Corp. v. North Dakota and the Multistate Tax Commission’s (MTC) latest attempt to erode that U.S. Supreme Court decision with respect to taxing remote sellers. Manager Brian Sengson also contributed to the article.
One of the largest providers of third-party logistics (3PL) is Amazon through its “Fulfillment-By-Amazon” service. While merchants may not always know where their inventory is located, states often have superior knowledge derived from auditing a 3PL provider or by reviewing the 3PL provider’s tax returns. Recently, the MTC offered remote sellers a tax amnesty, which ended on Dec. 1, 2017. As a result, such sellers need to be aware of such liability going forward. “Although merchants participating in a 3PL service technically have a physical presence in states where their inventory is held by the 3PL provider, the legality of imposing taxes on such merchants is a matter of unsettled constitutional law,” Stathopoulos writes. To read the full article, please click here.