New sales tax collection requirements for remote sellers and marketplace providers take effect October 1, 2019, in more than a dozen states — including Texas, the second most populous state in the nation. In fact, it’s getting hard to sell across state lines without encountering economic nexus, the fallout from the United States Supreme Court’s seminal sales tax decision in South Dakota v. Wayfair, Inc.
South Dakota v. Wayfair, Inc. recap
The Supreme Court’s ruling in South Dakota v. Wayfair, Inc. enables states to tax remote sales.
A business must have nexus — a connection with a state — for the state to require the business to collect and remit sales tax. Before the Wayfair ruling, sales tax nexus was based solely on physical presence: States couldn’t require an out-of-state seller with no physical presence in the state (remote seller) to collect and remit sales tax.
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september 23, 2019