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Sales Tax Economic Nexus: Is Your Business Prepared?

Sales Tax Economic Nexus: Is Your Business Prepared?

by BT Team

By September 19, 2018November 6th, 2023Insights
In the landmark decision of South Dakota v. Wayfair, Inc., the U.S. Supreme Court upheld South Dakota’s economic nexus law, which requires companies to collect sales tax when their sales or the number of transactions with the state exceed certain thresholds.
Since Wayfair, over 30 states have adopted sales tax economic nexus rules in some form, all with varying effective dates. While a few states have made their economic nexus rules effective on or around the June 21, 2018 issuance of the U.S. Supreme Court’s opinion in Wayfair, the first significant batch of state-imposed economic nexus rules become effective on October 1, 2018.

What Does This Mean for Your Business?

There are two issues to consider. First, you must determine in which states your business may be required to collect and remit sales tax based on level of activity. If your business has more than $100,000 of sales or more than 200 transactions to customers in any state, your business may be liable for collecting and remitting sales taxes to those states. However, because not all states have adopted or made effective an economic nexus rule, you may not be required to begin collecting and remitting sales taxes to those states immediately.
Second, you must determine whether your business’s specific products and/or services are subject to sales tax in that state. If your business is required to collect and remit sales taxes and is selling taxable products and/or services to customers in certain states, your business then needs a solution to comply with the actual sales tax collection and filing requirements imposed by these states.

How Bennett Thrasher Can Help

Bennett Thrasher’s state and local tax team is uniquely positioned to help your business:
(1)  Determine where and when you are required to collect and remit sales taxes under the new economic nexus rules;
(2)  Determine whether your products and/or services are subject to sales tax in those states; and
(3)  Find a sales tax compliance solution that fits your business’s needs.
In addition, we can identify and resolve any prior period sales tax exposure issues, prepare your business for a future sale and assist with many other state and local sales or income tax matters.

Learn More

For more information on how Bennett Thrasher can help with sales taxes or for any other tax related concerns, please contact your Bennett Thrasher tax advisor by calling 770.396.2200.