NEW YORK — As 2019 approaches, many online retailers are either collecting or preparing to collect sales tax from out-of-state-customers for the first time.
A majority of the states have enacted laws requiring remote sellers to collect sales tax following the Supreme Court’s South Dakota v. Wayfair decision in June. The court upheld a South Dakota statute that targeted online retailers who avoided collecting out-of-state sales tax because they didn’t have a physical presence like a store or distribution in a state — a decades-old exemption that the court threw out in its decision.
Thirty-one states now have laws requiring out-of-state retailers to collect sales tax, says Scott Peterson, a vice president at Avalara, a manufacturer of sales tax collection software. Some of the laws will go into effect in 2019. Five states have no sales tax: New Hampshire, Delaware, Montana, Oregon and Alaska, although some municipalities in Alaska do. The rest of the states have not yet passed laws.
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