June 21, 2018, Wayfair v South Dakota was announced by the US Supreme Court overruling the longstanding Quill v North Dakota (1992). The broad sweeping implications of this ruling was felt by taxpayers, practitioners and tax collection agencies alike during 2019. The year of 2019 witnessed a scramble of reactions from the multistate sales and use tax community. The year 2020 will have much more in store for the standard sellers and online Marketplace. This paradigm shifting event left the Marketplace scratching its head trying to understand the implications to their business and the necessary changes that will need to be made. A good place to start is to understand that Wayfair effected more than online sales and every company will need to do something, if not many things, in order to avoid a bad sales and use tax future. The states are knocking on doors and discovery notices are being sent to taxpayer with big dollars and long look back periods (28 years in some cases). The key with sales and use tax is documentation – not substance. The coming year will see the Marketplace changing significantly to ensure automated (mostly) sales and use tax rates, collection and compliance system technologies.
The attached 2019 Review of Sales Tax Systems is a good place to begin to understand which system fits your Economic/Physical Nexus profile to meet the sales and use tax demands of 2020.