South Carolina – Wayfair Nexus Potential 21 Year Look Back To 1998?! Seriously? Yes, Seriously. “Respond Within 30 Days”.


The SC DOR is sending out Form NEXQ-1 – Nexus Questionnaire First Request – inquiring about activities in South Carolina.

Several issues stand out on the Questionnaire. The first issue is found in the What you need to do section.

It states: “Non-voluntary filers (who are found to have established nexus) may be subject to taxes from 1998 – present”.

This could result in a 21 year look-back!

Another area of concern is found on the Business Activities Questionnaire – NX-100 (ie Discovery Notice) in Section C – South Carolina Business Activities: Number 8. This relates to the economic nexus (Enexus) thresholds resulting from the SCOTUS 2018 Wayfair ruling and the small seller exception.

It reads: “Is the company a remote seller (a retailer with no physical presence in SC) whose gross revenue from sales of tangible personal property, products transferred electronically, and services delivered into SC exceeds $100,000 in the previous calendar year or the current calendar year?”

The Wayfair Ruling was publicized and decided based in part on the non-retroactive application of the imposition. The Marketplace must keep in mind what is prospective today is retroactive tomorrow. Truth be told, all of the marketplace is already behind in its collective sales and use tax obligation and there are no longer Quill nexus protections.

The primary objective at this point is to be proactive and be prepared. The states tend to sometimes tax first and ask questions later. The increase in tax revenue is fertile ground for the state and local municipalities and I hope, in this new Wayfair World, the Community of the Marketplace is treated fairly by the Community of the Governments and vice versa, because in between and betwixt is the consumer – the ultimate payor of all debts public and private. This is an uncomfortable notice to receive. This process could be a lot more comfortable.