Jun 25, 2018
From KPMG TaxWatch
A number of states have already issued guidance and press releases in response to the U.S. Supreme Court’s June 21, 2018 decision in South Dakota v. Wayfair, Inc. in which the Court overruled the physical presence nexus standard of Quill and National Bellas Hess.
The North Dakota Office of the Tax Commissioner quickly announced that remote sellers are now required to collect North Dakota sales and use tax under a law, passed in 2017, that, similar to South Dakota’s, requires remote sellers to collect North Dakota sales and use tax if the seller’s sales into the state exceed $100,000 or if the seller has 200 or more sales shipped to North Dakota. A new webpage has been created, which provides resources for taxpayers to register and apply for a North Dakota sales and use tax permit. North Dakota tax Commissioner Rauschenberger announced that over the next few weeks, his “office will be working to implement this new law change.” The website indicates that it is a “work in progress” with information to be added as it is available.
The Minnesota Department of Revenue released a statement confirming that the Department is analyzing the Court’s decision to identify how it affects Minnesota and online retailers, remote sellers, and marketplace providers. According to the statement, the Department “will work with our customers to ensure fair, efficient, and transparent implementation of this decision.” The Department indicated that it will provide further guidance within 30 days.
The Louisiana Department of Revenue issued a statement noting that Louisiana’s nexus provisions are similar to the South Dakota law that was litigated in Wayfair, establishing a threshold of $100,000 of Louisiana sales or 200 or more separate transactions for delivery into Louisiana. In its statement, the Department notes that because the U.S. Supreme Court remanded Wayfair, it will be some time before there is a final decision and the full impact of the decision is known. Under current law, Louisiana’s sales and use tax collection requirements apply to all tax periods beginning on or after the date the U.S. Supreme Court rules in Wayfair that South Dakota’s economic nexus rules are constitutional. Interestingly, legislation (Senate Bill 1) was quickly introduced in the Louisiana Senate that, if passed, would change the effective date of Louisiana’s economic nexus rules to “all taxable periods beginning on or after August 1, 2018.”
Finally, each house of the New Jersey legislature quickly introduced bills (Assembly Bill 4261/Senate Bill 2974) that would adopt an economic nexus law identical to South Dakota’s. The collection obligation would begin the first day of a calendar quarter 90 days following enactment.
Please stay tuned to TWIST for future Wayfair responses.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.