30th Anniversary of Quill Decision

On May 26, 1992, the U.S. Supreme Court issued its opinion in Quill Corp. v. North Dakota (504 US 298). This was a significant nexus ruling modifying the earlier National Bellas Hess decision (386 US 753 (1967)). In Quill, the Court ruled that physical presence was not required for due process nexus but still required for commerce clause purposes.

That meant that Congress could modify the ruling since it controls the commerce clause, but not the due process clause. But that was difficult to do so states started finding ways to find physical presence. For example, we saw New York enact the so-called "Amazon" law where the state found a connection between certain affiliates in the state helping to sell a company's products and receiving a commission.

Finally, another case got to the Court - Wayfair, and the Court concluded "that the physical presence rule of Quill is unsound and incorrect." I think that makes sense as it did lead to odd results. For example, a company would have sales tax obligations for having an employee in a state even for a few days. But another company with more sales in the state has no sales tax obligations in the state becuase it was able to avoid physical presence in the state. In fact, Wayfair is a multi-billion dollar company that avoided physical presence in South Dakota. Yet, the company with hundreds of engineers could easily create a software program to collect sales tax from all customers and properly remit it to the appropraite states.

In Wayfair, the Court found that South Dakota's new nexus rule where a vendor has sales tax obligations if it delivered over $100,000 of goods or services into the state during the year or had 200 or more transactions of in-state deliveries.

Quill is still cited in some cases. It has a role in nexus history which is something I'm working on writing an article about - for the 30th anniversary.

Let me know if you have any observations to share. Thanks.

Two States Using Wayfair Economic Nexus Standard More Broadly

As we know, the June 2018 U.S. Supreme Court decision in South Dakota v. Wayfair, Inc., et al, allows for an economic nexus threshold for all types of taxes. Many states already had an economic nexus threshold for income taxes. Many states have adopted the South Dakota threshold for nexus. This standard generally starts use tax obligations when a vendor has over $100,000 of sales in the prior calendar year or the current year to date or 200 or more transactions.

Now, one state - Hawaii, has adopted that same threshold for its state income tax effective for tax years beginning after 12/31/19.  [SB 495 (Act 221, 7/2/19)] Hawaii's sales tax nexus threshold based on the South Dakota law upheld by the Court started 7/1/18.

Also, the Texas Comptroller has proposed the same via a proposed regulatory change for its franchise tax. The Texas sales tax Wayfair threshold though is over $500,000 of sales and it doesn't matter how many transactions there are (there is only a dollar sales threshold).

Remember that a state cannot override P.L. 86-272 which still applies to limit nexus if a taxpayer has no physical presence other than sales personnel who solicit orders that are approved and shipped from out-of-state. This is relevant for Hawaii's state income tax, but doesn't apply to the Texas franchise tax because it is not a net income tax.

Making the thresholds the same should be a lot simpler for small businesses. I don't agree with the South Dakota threshold's 200 or more transactions because for many small businesses though because that can be a small dollar amount, such as if selling items that cost less than $10 each. I think that is not sufficient nexus for commerce clause purposes.  I think states should do like California and Texas did and drop the transaction threshold and only use a dollar of sales gross receipts that is at least $100,000 and perhaps higher in large states (after all, buyers not charged sales tax still have to pay use tax on their own, and the higher threshold keeps the burden on the state tax agency more manageable and more likely that most remote vendors will be found and have to collect.

Not all states define sales the same for these purposes so there is still complexity for multistate sellers. But for a remote seller to know that once they have use tax collection obligations in a state they also have income tax obligations (assuming they are not protected by PL 86-272), should provide greater certainty to businesses and state tax agencies and simplify recordkeeping.

What do you think?

California to follow South Dakota nexus threshold of the Wayfair decision!

California Revenue & Taxation Section 6203(c) put the state in an unusual position after the June 2018 Supreme Court decision in South Dakota v. Wayfair, Inc. The California Department of Tax and Fee Administration (CDTFA) had to decide what the decision meant and administer that finding. Meanwhile, the state legislature had to determine its role and the timing of any action.

R&T Section 6203(c) provides: “Retailer engaged in business in this state” as used in this section and Section 6202 means any retailer that has substantial nexus with this state for purposes of the commerce clause of the United States Constitution and any retailer upon whom federal law permits this state to impose a use tax collection duty." This certainly meant something different on June 21, 2018 than it did prior to that date. With the Court finding that Quill and its physical presence standard for commerce clause nexus was "unsound and incorrect", what is the new standard?

The Court found the 2016 South Dakota law (SB 106) which was before it acceptable as a nexus standard due to these three features:

1. Threshold - Collection obligations only exist if a seller had over $100,000 of sales into the state in the prior or current calendar year, or 200 or more transactions.
2. No retroactive application.
3. South Dakota adopted the Streamlined Sales and Use Tax Agreement (SSUTA) which provides some simplification and requires the state to offer free software to remote sellers and audit protection if they use it.

Well, how do those factors apply in California which is a much larger state than South Dakota and has not adopted the SSUTA and does not provide free software?

South Dakota has just under 1 million people which California has over 39 million. So, with far more buyer in California as well as far more business buyers, considering the worldwide market, the South Dakota threshold would cause hundreds of thousands of small businesses to become collectors of California sales tax In Etsy's amicus brief filed in the Wayfair case, it noted that in 2017, its 1.9 million sellers generated $3.25 billion of gross sales (page 8). That means average sales for an Etsy business of $1,710, well below the $100,000 threshold. But, it would be very easy for many of these businesses to have 200 or more transactions in California in a year. Think of all of the sellers using Fulfillment by Amazon (FBA), eBay, Etsy, crowdfunding sites, and others to sell low value items. With over 39 million possible buyers in California, the CDTFA should be seeing an incredible increase in registered sellers.

Can a state that does not follow the SSUTA or provide free software to remote vendors meet the Court's new nexus standard? We don't know.

Well, on December 11, the CDTFA announced that it would follow the South Dakota thresholds starting April 1, 2019 (NR-18-59). This allows some lead time for the thousands of remote vendors who crossed one of the thresholds in 2018 (the calendar year prior to 4/1/19). It also gives some time for all remote vendors to start tracking sales into California. However, the new procedure does not provide any lead time once you cross the threshold. For example, let's say a vendor selling $10 socks online makes its 200th transaction to a California customer on July 1, 2019, based on 2019 sales. It needs to register and start collecting immediately(similar in most other states as well). There is no lead time once the threshold is crossed to allow for updating or obtaining software and being prepared for the new compliance obligations. For more, see CDTFA Special Notice L-565 (Dec. 2018). Note: The CDTFA held a stakeholder meeting to explain its role per R&T 6203(c) and obtain income (see information and links here).

Another change announced December 11 affects both remote and in-state sellers. Many cities, counties and special districts in California have various sales taxes such as to help fund transportation. These are known as district taxes. Prior to Wayfair, an in-state vendor only had to collect them on sales delivered to districts where they had a physical presence. Now, they must be collected in districts where they meet the over $100,000 sales or 200 or more transactions threshold. See CDTFA Special Notice L-591 (Dec. 2018). So, even in-state sellers already collecting California sales tax must implement new recordkeeping requirements. The CDTFA notes that sellers might just want to "courtesy collect" the district tax for all California sales. That likely is easier than having to track sales into all counties unless the seller knows it won't meet the threshold anywhere so only has to collect where it has a physical presence.

The CDTFA provides a good deal of information on collection obligations at http://cdtfa.ca.gov/industry/wayfair.htm.

On December 10, the chairs of the state's tax committees announced that they would continue to look at whether changes are needed, noting that the decision might not work in a state with almost 40 million residents.

Certainly one area that lawmakers have to address is additional funding for the CDTFA to deal with the hundreds of thousands of new sales tax collectors that should be registering and perhaps seeking assistance of the CDTFA. These vendors are located throughout the world. Also, the CDTFA needs to get and regularly update data on the number of vendors outside of California that meet the threshold. If the number of registrants doesn't match this data, to be fair to instate tax collectors, the CDTFA needs to go out and find these vendors even though they are located throughout the world.

With such a low threshold of 200 or more transactions, the enforcement effort will be a poor use of resources. There needs to be a balance of what is realistic for the CDTFA to enforce among sellers versus continuing to collect use tax from California buyers.

Also, the risk of litigation in California or another state by small vendors challenging the 200 or more transactions threshold seems great. That threshold seems to impede interstate commerce, particularly where the transaction value is low. After all, someone selling $1 items would have to start collecting even though sales into one of several states now using the South Dakota standards is only $200!

We'll see what happens. The April 1, 2019 start date gives lawmakers time to act, such as by removing the transaction threshold and just using the $100,000 gross receipts threshold. They should also see about offering free software to remote vendors as that should help the CDTFA as well. And more funds should be allocated to the CDTFA to help with their expanded tax administration duties. The lawmakers' press release also includes a statement from former BOE member and now State Treasurer-elect Fiona Ma that suggests California should follow the lead of a few others states and have marketplace facilitators, such as Amazon collect.

We'll see.

Originally posed on SalesTaxSupport on 12/17/18.

California, the CDTFA and the Wayfair Decision

On October 24, 2018, the California Department of Tax and Fee Administration (CDTFA) held an information session on the Wayfair decision's application in California. California's statute says we interpret the commerce clause as is done at the federal level. So that interpretation changed with the US Supreme Court's decision on June 21, 2018 when they found that the longstanding physical presence nexus rule of Quill (1992) is incorrect and unsound.

I attended the hearing.  It was short and the CDTFA provided some helpful information about the application of Wayfair to district taxes in California, and more. They also took questions and comments. I offered a few. The CDTFA was also taking written comments.  Following is what I suggested to the CDTFA in my written comments. My key concern is that if California follows the South Dakota standard, hundreds of thousands (possibly even over 1 million, and all over the world) of remote vendors are going to meet the 200 or more transactions per year due to the 39 million possible customers in California (SD has a population under 1 million in contrast). Thus, the transaction threshold should be skipped and we aim for a sales and use tax system that balances realistic enforcement activity by the CDTFA and the continued need to have California buyers self-assess and pay use tax (which will apply in fewer transactions due to larger vendors meeting the $100K per calendar year threshold).

What do you think (please read on)?

“Retailer engaged in business in this state” as meaning “any retailer that has substantial nexus with this state for purposes of the commerce clause of the United States Constitution” (R&T §6203(c)) must now be interpreted in light of the U.S. Supreme Court’s new commerce clause interpretation as spelled out in South Dakota v. Wayfair, 138 S.Ct. 2080 (6/21/18). This is not an easy task, but a necessary one as the statute needs to be followed.

Key elements of the Wayfair decision:

• The “physical presence rule of Quill [Corp. v. North Dakota, 502 U.S. 808 (1992)] is unsound and incorrect.”
• The physical presence standard should not be the standard for the “substantial nexus,” first part of the four-part test of Complete Auto Transit (430 U.S. 274, 279 (1977)).
• Physical presence is an “arbitrary, formalistic” measure.
• South Dakota’s sales tax collection requirement protects interstate commerce by ensuring “sufficient nexus” based on both “economic and virtual contacts” sellers have with the state. Three features of South Dakota law (S. 106 (2016)) support this:

a.     Safe harbor for limited business activity: South Dakota law only requires remote sellers who annually have over $100,000 of sales of goods or services into the state or 200 or more transactions.

b.     No retroactive application: There is no obligation to remit sales tax for years preceding the effective date of the state’s remote sales law.

c.      A system to reduce administrative and compliance costs: South Dakota follows the Streamlined Sales and Use Tax Agreement (“SSUTA”). The SSUTA requires uniform definitions, state level tax administration, and the provision of compliance software to sellers with audit protection to those who use it.

d. The Court did not find that all remote sellers can be subject to a state’s taxes.

The first two of the three features of South Dakota law are relatively easy to implement. However, the third feature is not so simple and it is not clear how important each feature of the SSUTA is. For example, is it the availability of free, audit protected software to remote sellers? Or are other compliance features possible substitutes?

Another factor to consider is that California with a population of 39.5 million, relative to South Dakota’s population of 870,000, presents an entirely different administrative challenge for the CDTFA. That is, far more remote vendors will meet the 200 or more transactions in a year in California than in South Dakota. These sellers are not only located in the U.S. but outside of California, but also outside of the United States. For example, Amazon’s Fulfillment by Amazon (FBA) program, Shopify and eBay serve sellers from outside of the U.S. It would be very easy for a vendor selling socks, books, holiday decorations, or other tangible items to have 200 customers in a year in California. In addition, other sales sites including crowdfunding sites where emerging businesses provide tangible goods to funders, can easily become “retailers engaged in business” in California under the limited business activity thresholds of South Dakota law that were reviewed by the Court.

The significant number of vendors that would be subject to sales tax collection in California under the South Dakota thresholds raises at least two challenges:

1)     Possible litigation under the commerce clause that the burden of compliance with California and other state tax laws is an undue burden on interstate commerce. While the Court did uphold the South Dakota law, the retailers involved in the litigation all had annual revenues exceeding $1 billion. The Court did not consider that the 200-transaction threshold could apply to vendors with far less than $100,000 annual sales in a state. In its amicus brief, Etsy states that in 2017, 1.9 million businesses using its site generated $3.25 billion of gross sales. This averages $1,711 per seller. Many of these sellers though, could easily have 200 or more transactions in states with large populations such as California. This litigation possibility is not unique to California but could arise in any state.

Application of the 200-transaction threshold without the SSUTA features or SSUTA-type features might also lead to litigation on the basis that the state’s broadened nexus reach violates the commerce clause and is not in line with the Supreme Court’s new nexus interpretation.

2)     Can the CDTFA effectively administer sales tax administration for hundreds of thousands of remote vendors that would meet the 200-or-more-transaction threshold and treat such “retailers engaged in business in this state” similar to retailers physically present in the state? Also, is this significant task an appropriate use of resources considering the ability to continue to collect use tax from in-state buyers who are not charged sales tax by a seller? The Wayfair decision does not eliminate the need to continue to enforce use tax laws against in-state buyers as not all sellers will meet sales tax collection requirements under the South Dakota thresholds.

New sales tax collection obligations for vendors requires vendors to make possibly significant changes to be ready to calculate, collect and remit the sales tax. Software is likely needed that needs to be integrated into existing recordkeeping and sales software. Vendors may need to seek assistance from tax advisers which requires time in finding an adviser and ensuring everything is properly in place so that collection and remittance can be performed correctly and efficiently. Thus, when the CDTFA announces a date for when its interpretation of Revenue and Taxation §6203(c) in light of the Wayfair decision is effective, there should be sufficient lead time (likely 90 days minimum) before any vendor is required to start collecting and remitting. Vendors need time to review sales of the past calendar year and current calendar year to see if they even meet the specified thresholds.

Similarly, going forward once a vendor crosses the collection thresholds, they should be given 60 to 90 days before they must start collecting, for the reasons noted earlier.

Also, changes in the responsibility of in-state vendors to start collecting district taxes in districts where the vendor meets the CDTFA threshold requires lead time to review past records and get a recordkeeping system in place to track where and when a vendor has new district tax obligations.

Finally, consumers may think that the Wayfair decision and the announcement of how the CDTFA will modify the interpretation of R&T §6203(c) in light of that decision, means that use tax is no longer required. Thus, it will be important to clarify this for both individual and business buyers so they know they still have use tax reporting and payment obligations when they are not charged sales tax on taxable items.

Additional Information:

• National Conference of State Legislators (NCSL).“Principles of State Implementation after South Dakota v. Wayfair” (6/29/18).
• Nellen, “A Wayfair Whirlwind of Stakeholder Considerations – Part 1,” State Tax Notes, 10/15/18; and Part 2, forthcoming.
• “Is There a Fair Way Forward after Wayfair?  Assessing the Effect in California of the United States Supreme Court’s Recent Decision,” Joint Informational Hearing of the Assembly Committee on Revenue and Taxation and Senate Committee Governance and Finance, 10/15/18; outline of Nellen testimony.
• Nellen, 21^st Century Taxation blog, “State Reactions to Wayfair Decision”.

More on Wayfair

There have been many articles on the June 2018 US Supreme Court's decision in South Dakota v Wayfair. But, that's not surprising given the decision overrode 51 years of state tax precedence!  I've written two article (so far) and a few blog posts.

One post (8/3/18) was on SalesTaxSupport.com where I asked the question - what if the parties were not billion dollar vendors? I think it is too bad the vendors in the case were so large. After the case, Wayfair issued a press release noting that it was already collecting tax on 80% of sales with that figure growing as its logistics footprint grows (that is, it was setting up distribution or other operations in more states).**

Wayfair's 2017 10-K also indicates it has over 1,300 engineers and data scientists! Well, that makes it a lot easier to create a logistics system to collect sales tax from all customers and remit it to the state. What about a vendor who sold 200 $1 items to customers in the state?

Additional examples of small vendors I came across recently in doing research on taxes and crowdfunding are small vendors raising money on crowdfunding sites such as Kickstarter. In fact, I gave $30 to a party trying to raise funds to create and distribute calendars. And they are not alone. There are similar sites where someone is trying to raise funds to create a comic book, artwork and more calendars. If the party I gave the money to hits his target (and he did), I'll be sent a printed calendar. The party says they will ship to anywhere in the world. Well, 200 or more of these sales in a state will create sales tax collection costs too in a growing number of states, despite being what appears to be a small vendor. Hitting that figure is more likely in high population states such as California.

I see that some of the sellers of calendars and comic books are providing a pdf of the item. While that is not taxable in all states, the seller needs to check the law in each state to be sure and for states that find sales tax nexus with 200 or more transactions in the state, whether that figure includes taxable and non-taxable transactions in that count.

Some states and likely more will enact legislation making the "marketplace facilitator" such as Etsy and eBay collect tax.  I think Kickstarter and other crowdfunding sites will likely fall under this definition, but states should be sure (see Pennsylvania's definition here). Unlike eBay and Etsy, Kickstarter does more than help people sell products. Also, the funders might be providing more than needed to receive the product. That raises more issues on the sales tax collection side. Also, when must the sales tax be remitted because on many sites, the party doesn't get the funds if their target is not met, or they might get the funds, but never deliver the product.

What do you think?

**Here is the blog post originally posted on SalesTaxSupport on 8/3/18

Wayfair - What If the Respondents Were NOT Billion Dollar Sellers?

The U.S. Supreme Court's ruling in South Dakota v. Wayfair, Inc., et al, on June 21, 2018 is a landmark one, overturning 51 years of precedent to find that physical presence is not the appropriate standard for nexus. I won't go into the details as much has been written about the case (for example, do a search for "Wayfair" on SalesTaxSupport.com).

South Dakota's law change in 2016 (SB 106) provided that a vendor had sales tax collection obligations if it had over $100,000 of gross revenue into the state or 200 or more transactions in the previous calendar year or the current calendar year. South Dakota is a member of the Streamlined Sales and Use Tax Agreement (SSUTA) so provides software and other resources to help vendors comply.

The Court found that the "economic and virtual contacts respondents have with" SD were sufficient for nexus. SD law also included features "designed to prevent discrimination against or undue burdens upon interstate commerce." The three features:

1.       A small vendor safe harbor (the $100,000 of sales or 200 or more transactions in 12 months threshold);

2.       The law does not apply retroactively; and

3.       As an adopter of the SSUTA, SD law has features that "reduce administrative and compliance costs" such as uniform definitions, and access to software with audit protection for using it.

One of the aspects of the case that I find interesting is the size of the three plaintiffs. Wayfair, Inc., Overstock.com, Inc., and Newegg, Inc., all have sales over $1 billion per year. The first two are publicly traded companies (links are to their recent 10-K reports and for Newegg, to a 2009 S-1 report). If you don't know the background of these companies, I encourage you to look at the 10-Ks (see links) of Wayfair and Overstock.com. It really hits you that these are really tech companies, using the technology to create unique shopping experiences - 21st century retailers. The co-founders of Wayfair are engineers who "created a company culture deeply rooted in technolgoy and data." Wayfair has a "team of over 1,300 engineers and data scientists" in their workforce! That is out of 7,751 full-time equivalent employees (per the 2017 10-K report).

Certainly, based on size and technical expertise and ability to navigate many laws including those of the SEC, these respondents will have no problem collecting sales tax. Wayfair has already indicated such in a 6/21 press release where it says it already handles sales tax on about 80% of U.S. orders. They "do not expect today's decision to have any noticeable impact on our business, as it may on other retailers who do not currently collect and remit sales tax." On 6/28, Overstock.com stated that its decision to voluntarily collect in all tax jurisdictions has not led to any noticable sales decline.

Would a small remote vendor selling 200 or more $5 items into South Dakota be able to make the same claims? That is - no problem collecting? I don't think so.

What if instead of three very large retailers, the respondents were vendors who barely crossed the SD safe harbor thresholds? Would the Court have taken a different perspective?

Of course, the Court did remand the case to the SD Supreme Court, but the respondents remain the same.

While over $100,000 of sales into a state is arguably a good indicator of a company large enough to handle sales tax collection, the 200 or more transactions is not. Is the number of transactions safe harbor even needed? Why not just use gross receipts? Yes, a company might sell a single item costing $90,000, but the state has other ways to handle such transactions. Such a sale would likely be to a business and the business buyer could be required to self-assess the sales tax on the spot. If it was an individual buyer, chances are good it was a car, boat or plane that needs to be registered and sales/use tax can be collected then. If it were artwork, jewelry or clothing, alternatives would be needed, but doable.

Many states are following the SD approach. I suspect that we'll see near future litigation with a small vendor challenging the existence of substantial nexus based on 200 transactions in a year of nominal value each.

What do you think?

State Reactions to Wayfair Decision

UPDATED 9/30/19  [I do my best to keep it up to date, but there likely are omissions. Also see the very helpful State-by-state guide to economic nexus laws from Avalara for more updated list.]
What are some states saying about the U.S. Supreme Court's decision in South Dakota v Wayfair, et al [see my 6/22/18 post for more on the case]

Here is news from several states. I don't think most states will strive to collect below the thresholds of the South Dakota law, but you never know. I think we'll hear from more states by early 2019 and perhaps even from a few members of Congress. I'll continue to update this post.

States in bold are full members of the Streamlined Sales and Use Tax project. The SSUTA scheduled an emergency meeting of the SSUTA Board for July 19-20 to discuss the Wayfair decision. Agenda items included use of the Central Registration System and the Certified Service Provider system by non-members.

Also look for what applies for local governments, particularly in Alabama, California (see below), Colorado, and Louisiana.

Also, on 6/29/18, the National Conference of State Legislatures released its Principles of State Implementation after South Dakota v. Wayfair. This 1-page document suggests that states be prepared before more broadly enforcing tax collection and wait  until 1/1/19 to start collecting. It also includes suggestions for states that that have not adopted the Streamlined Sales and Use Tax Agreement (SSUTA).

• Alabama - The Dept. of Revenue released a statement on 7/3/18 that reminds readers that the DOR issued economic nexus sales tax rules in 2016. Per the DOR, these will be applied prospectively starting for sales made after 9/30/18, even though the rules were effective 1/1/16. The threshold for economic nexus under the rules is annual sales in the state above $250,000, The statement also notes the state's marketplace facilitators law also for sales exceeding $250,000. These facilitators must collect sales tax on sales of its third-party sellers or comply with the reporting and customer notification rules. Also see HB 470 enacted in April 2018 extending collection to marketplace facilitators and Reg 810-6-2-.90.03.
• Alaska - There is no state sales tax, but some of the cities impose sales/use tax. The City of Nome amended its Ordinance No. O-19-08-01 (8/26/19) to clarify when remote sellers and marketplace facilitators have collection obligations.
• Arkansas - SB 576 (Act No. 822; 4/10/19) - imposes marketplace facilitator collection obligations if deliveries to state exceed $100,000 or 200 transactions.
  
  DOR FAQs for Remote Sellers. Also see 
• DOR website for Remote Sellers
• Opinion No. 20190501 (8/29/19) - states that the threshold is based on taxable sales (not also sales for resale, for example). But notes that the seller needs to retain appropriate records if making exempt sales in the state,
• Legal Opinion No. 20190702 (8/9/19) on application of the nexus threshold and sales/use tax to a direct mail marketer.
• Revenue Legal Counsel memo 9/9/19
• Arizona - HB 2757 (5/31/19) requires marketplace facilitators to start collecting on 10/1/19 if they have over $100,000 of sales. Remote seller must collect if in the prior year or current year to date, they have over $200,000 of direct sales into Arizona. For 2020, this threshold drops to $150,000 and to $100,000 for 2021 and thereafter. See DOR website for out-of-state sellers + Registration under new rules for remote sellers and marketplace facilitators (starting 10/1/19)/
• California - This is one of the states that already had broad language in its statute that with the repeal of Quill, likely allows the state agency (California Department of Tax and Fee Administration (CDTFA)) to start collecting from remote vendors with over $100,000 of sales in the state or 200 or more transactions. I say "likely" because while California Revenue & Taxation Code Section 6203(c) provides that retailer in the state includes "any retailer that has substantial nexus with this state for purposes of the commerce clause of the U.S. Constitution," is the $100,000 receipts or 200 transaction threshold enough for the state? The U.S. Supreme Court noted three aspects of the SD law that supported nexus within commerce clause parameters (see page 23 of the opinion): (1) safe harbors of the $100,000 receipts or 200 transactions, (2) no retroactive application, and (3) SD belongs to the SSUTA which requires states to offer free software for compliance and audit protection if used, as well as standardized definitions and other administrative benefits. While the CDTFA can offer (1) and (2), it can't easily offer (3). That would likely take some additional appropriations. In fact, given the size of California, its customer base likely supports many remote vendors who meet the safe harbors of the SD law. Can the CDTFA handle all of the new registrations and support that would be needed without an allocation of more funds? Also, might the legislature of this state that is home to eBay, want to raise the safe harbor thresholds?  And, how important is (3)? Are factors (1) and (2) enough?
  
  Hearings: On 10/15/18, the Senate and Assembly taxation committees held a joint information hearing. On 10/24/18, the CDTFA held an informational hearing on Wayfair.
  
  CDTFA Action: On 12/11/18, the CDTFA announced that it would follow the SD thresholds as measured in the prior or current calendar year, starting 4/1/19 (Special Notice L-565 (Dec. 2018)). Also, in-state sellers must apply the Wayfair standards to determine if they must collect district taxes anywhere they ship in California and are not already collecting in that district (such as because they don't have a physical presence there) (Special Notice L-591 (Dec. 2018)). Also see CDTFA website and FAQs - here.
  
  AB 147 Enacted (Chapter 5, 4/25/19) - this makes significant changes to the CDTFA action including that the transaction quantity standard is removed, the sales threshold is increased to $500,000, a marketplace facilitator collection requirement is added (starting 10/1/19) and a vendor with over $500,000 of sales will also have to collect the district level tax (the local tax beyond the state rate of 7.25%) regardless of the amount of sales in a district. The new thresholds apply starting 4/1/19. Also see CDTFA Notice L632. Also see CDTFA proposed amendment to Reg 1684 for the new changes.
  
  CDTFA Wayfair website - lots of info!
  
  CDTFA guidance for marketplace sellers and facilitators. Note that these changes also affect in-state sellers who sell via a marketplace facilitator.
• Special Notice L-694 (Aug. 2019)
• Special Notice L-700 (Aug. 2019)
• Tax Guide for Marketplace Facilitator Act (MPFA; starts 10/1/19) + see the FAQs
• Colorado - See new website links here. Tax collection for remote sellers starts 12/1/18. Sellers meeting the new nexus thresholds are to register by 11/30/18. The thresholds are the same as for South Dakota. More info - In-State Retailers + Out-of-State Retailers.
• Connecticut - SB 417 (Public Act 18-152; 6/14/18) modifies the states economic nexus for sales tax for remote vendors to having at least $250,000 of retail sales in the state and 200 or more transactions, effective 12/1/18. Also see Dept. of Revenue Services Special Motice (5.1) explanation of the law change related to Wayfair, as well as the explanation of the marketplace facilitator law change.
• District of Columbia (DC) - B22-0914 (Act No. A22-0584; 1/18/19) adopts the SD thresholds. The revenues generates are to be used to lower commercial property tax rates. Also see DC's Office of Tax and Revenue website on sales tax.
• Georgia - At 1/1/19, follows an economic nexus standard of over $250,000 of sales into the state in the prior or current calendar year or 200 or more separate retail sales of tangible personal property. Alternatively, the vendor must issue a notice to the buyer and state. See HB 61 (Act 365, 5/3/18). Click here for more information from the Georgia Dept. of Revenue.
• Hawaii - Prior to the Court's decision, Hawaii enacted SB 2514 (Act 41, 6/13/18) to match the South Dakota law, effective 7/1/18, but applying to tax years beginning after 12/31/17. In Announcement No. 2018-10 (6/27/18), the Dept. of Taxation stated that it had been unclear when its general excise tax (GET) applied when a seller did not have a physical presence in the state. Act 41 though, provides clarification. Starting 7/1/18, taxpayers must obtain a GET license and file returns and remit the GET if for the current or prior year the taxpayer had gross income or proceeds of $100,000 or more, or 200 or more separate transactions from tangible property delivered in Hawaii, services used or consumed in Hawaii or intangible property used in Hawaii. Thus, Hawaii started with an effective date (retroactive) of 1/1/18 (that is, a vendor could have crossed the requisite threshold in 2017 making it subject to collection starting 2018). However, on 7/10/18, the Dept.of Taxation announced that because the Supreme Court noted that SD law was not retroactive, to avoid constitutional challenge, Hawaii will not apply its law to sellers who lacked physical presence prior to 7/1/18 (see amended announcement).
  
  SB 495 (Act 221, 7/2/19) adopts the sales tax threshold to also be the nexus threshold for state income taxes for businesses that don't have a physical presence in the state, effective for tax years beginning after 12/31/19. Observation: A state cannot override P.L. 86-272 which still applies to possibly limit nexus if a taxpayer has not physical presence other than sales personnel who solicit orders that are approved and shipped from out-of-state.
• Idaho - The State Tax Commission issued an explanation on 8/15/18. Remote retailers must collect if they have an agreement with an Idaho retailer to refer buyers to the remote seller for a commission on the sale, and total sales to in-state buyers due to such agreements exceeds $10,000 in the prior 12 months. This is the state's "click through" nexus rule. The announcement states that the Tax Commission is "carefully analyzing" how the Wayfair decision affects remote sellers.
  
  HB 259 (enacted 4/9/19; Chapter 320), effective 6/1/19 - internet retailers and marketplace facilitators to collect and remit sales and use tax. See summary in summer newsletter of the State Tax Commission.
  
  State Tax Commission's guide for online sellers + Tax Update for Summer 2019.
• Illinois - Enacted HB 3342 (Public Act 100-0587)on 6/4/18. Article 80 includes a “marketplace fairness” provision providing that a vendor is considered a “retailer maintaining a place of business” in the state if it makes sales of tangible personal property to buyers in the state, from outside of the state and have cumulative gross receipts from sales of such property of $100,000 or more, or has 200 or more separate transactions for the sale of tangible personal property to Illinois buyers. The determination is made quarterly by looking 12 months back from the last day of March, June, September or December. If the criteria is met, the retailer must collect and remit sales tax for one year. At the end of that year, if the criteria continue to be met, collection continues. Effective starting 10/1/18.
• Indiana - Has an amnesty program through the end of 2018 for online vendors who should have been collecting such as because they have inventory in the state.  The DOR released a statement noting that on 6/21/18, Governor Holcomb said they were studying ruhe ruling "to better understand its implications for Indiana."
• Iowa - Prior to the Court's decision, Iowa enacted SF 2417 effective 1/1/19 which basically mirrors South Dakota law. On 6/25/18, the Dept. of Revenue issued an explanation and a reminder that if a vendor has physical presence and has not been reporting, it should consider the voluntary disclosure purposes. The new economic nexus law is prospective only (starting 1/1/19) including the requirement that marketplace facilitators meeting the SD threshold collect starting 1/1/19. For an example of how the expanded sales tax nexus can apply to a remote vendor, see the DOR's ruling in Fairytale Brownies, Inc., an Arizona-based company selling product into Iowa (Dkt No. 2018-300-2-0440; 12/7/18). The company's website indicates it collects tax on sales to Iowa customers starting 1/1/19.
  
  H 779 (5/16/19) - removes the 200 transaction threshold.
  
  Marketplace Facilitator law effective 1/1/19. See DOR's Food Delivery Services as Marketplace Facilitators.
  
  Regulations (8/8/19), effective 10/2/19, explains the Wayfair rules including definitions such as for remote seller, sales threshold
• Kansas - On 8/1/19, the Kansas Dept of Revenue released Notice 19-04, Sales Tax Requirements for Retailers Doing Business In Kansas. It states that after Wayfair, the physical presence standard no longer applies for sales/use tax. The DOR also notes that the state "imposes its sales and use tax collection requirements to the fullest extent permitted by law." It then states that all remote sellers who are not already registered to collect, must do so by 10/1/19. Because Kansas is part of the SSUTA, the notice states that sellers can register for all of the 24 SSUTA states at once using the online application system - http://www.sstregister.org. Or, they can register directly at the Kansas DOR site (thereby registering in just that state). Registering via SSUTA provides access to Certified Service Providers to assist with the filings; free to remote sellers. The notice also encourages marketplace facilitators to consider entering voluntary compliance agreements with the DOR.
  
  On 9/30/19, Kansas Attorney General Schmidt issued an 18-page memo indicating the DOR position is incorrect - that it "is of no force or legal effect because it was not lawfully adopted in compliance with Kansas law." Governor Kelly issued a memo in response indicating that the DOR rule serves to protect those doing business on "Main Street" in Kansas and the DOR position "simply reaffirms this tax fairness." Also see 9/4/19 14-page memo by Kansas Secretary of Revenue Burghart to AG Andaya.
• Kentucky - DOR news release on HB 487, which would adopt the South Dakota thresholds, effective 7/1/18.
• Louisiana – The Department of Revenue issued a statement on 6/21/18 that “it is far too soon for a definitive estimate of what the state will receive from online sales as a result of today’s decision, but when appropriate, we will provide updates.” Update: On 8/10/18, the DOR issued Remote Sellers Information Bulletin No. 18-001 on the impact of the decision. Legislation in 2017 created the Louisiana Sales and Use Tax Commission for Remote Sellers. The Commission will not seek to enforce collection on remote sellers for any period beginning before 1/1/19. The Bulletin also observes "there is no requirement in the Wayfair decision that states adopt the Streamlined Sales and Use Tax Agreement in order to meet Commerce Clause standards." Additional guidance will be released "as appropriate."
  
  DOR's Remote Sellers Information Bulletin No. 19-001 (5/17/19).
  
  Observation: The Supreme Court did note three features of SD law "that appear designed to prevent discrimination against or undue burdens upon interstate commerce." One of these features is that SD is a member of the SSUTA meaning it has some uniform definitions as well as provides software to vendors and audit protection if it is used. [case page 23]
• Maine - A 2017 law change (36 M.R.S. §1951-B(3); Chapter 245) adopted the SD thresholds. In a 10/1/17 newsletter, the Department of Revenue says the change is effective 11/1/17, but the legislation says effective once permitted per the U.S. Constitution. Also see tax agency's August 2018 release and website.
• Maryland - A undated Tax Alert from the Comptroller states reminds folks that Maryland law imposes sales tax collection obligations "as broadly as is permitted under the United States Constitution. It includes an interesting "figure it out yourself" statement: "If you sell or deliver tangible personal property or a taxable service for use in Maryland, you should review and analyze the United States Supreme Court's decision in [Wayfair] to identify how it affects you."
  
  In September, the state got more specific noting it would follow the South Dakota approach starting 10/1/18. Also see Tax Alert 09-19 on Marketplace Facilitators.
• Massachusetts – in a 6/22/18 news release, the Department of Revenue noted that its existing regulation 830 CMR 64H.1.7 (Vendors Making Internet Sales), effective October 2017 remains in effect and is not affected by the Wayfair decision. This regulation has also been referred to as the “cookie nexus” rule. This regulation includes the following:

“Unlike the mail order vendor at issue in Quill, Internet vendors with a large volume of Massachusetts sales invariably have one or more of the following contacts with the state that function to facilitate or enhance such in-state sales and constitute the requisite in-state physical presence. …”

a.  property interests in and/or the use of in-state software (e.g., “apps”) and ancillary data (e.g.,“cookies”) which are distributed to or stored on the computers or other physical communications devices of a vendor’s in-state customers, and may enable the vendor’s use of such physical devices;

b.  contracts and/or other relationships with content distribution networks resulting in the use of in-state servers and other computer hardware and/or the receipt of server or hardware-related in-state services; and/or

c.  contracts and/or other relationships with online marketplace facilitators and/or delivery companies resulting in in-state services, including, but not limited to, payment processing and order fulfillment, order management, return processing or otherwise assisting with returns and exchanges, the preparation of sales reports or other analytics and consumer access to customer service.”

The sales tax collection thresholds is over $500,000 of sales into the state AND 100 or more transactions in the prior calendar year. Also see the state's FAQs for before 10/1/19 and FAQs for 10/1/19 and later.

• Michigan - Per Revenue Administrative Bulletin 2018-16 (8/1/18), starting 10/1/18, remote sellers with both taxable and non-taxable sales into the state in excess of $100,000 or 200 or more separate transactions based on the prior calendar year, has nexus and must register and start collecting. No tax is owed prior to this date (unless they otherwise had nexus such as under the state's click-through nexus rule). If sales level later drop for a calendar year, the seller can stop collecting the next year. Also see FAQs on remote sales in light of the Wayfair decision.
• Minnesota – The Department of Revenue issued a news release on 6/21 stating that the Wayfair decision means that “states like Minnesota can require certain retailers with no physical presence, such as online sellers, to collect and remit the applicable sales or use tax on sales delivered to locations within their state.” The DOR also stated that they “will work with our customers to ensure fair, efficient, and transparent implementation of this decision. We will provide further guidance within 30 days. The department will work hard to provide our customers with the information and services they need to meet their sales and use tax obligations under Minnesota tax law in as smooth and efficient manner as possible.” The DOR expects to issue guidance within 30 days for vendors not presently collected sales tax from Minnesota customers. The DOR also observes that vendors who want to start collecting now can register to do so with Minnesota and the other 23 member states of the Streamlined Sales Tax System at https://www.sstregister.org/.  Also see update for marketplace providers and FAQs.
  
  In a 7/17 memo, the DOR noted it is hosting the emergency meeting of the SST Governing Board on July 19 and 20. Also, an announcement about sales tax enforcement for remote sellers and marketplace providers will by made on 7/25/18. The DOR also has a "red envelope" on its website where remote sellers can sign up to get emailed updates.
  
  A 7/25 memo from DOR states that remote sellers and Marketplace Providers that facilitate sales will be required to start collecting sales tax by 10/1/18. This memo includes links to the relevant law (297A.66) and some FAQs for remote sellers. Small remote sellers are exempt from collection if during the prior consecutive 12-month period they had less than 100 retail sales shipped to Minnesota and less than ten retail sales shipped to Minnesota that total over $100,000.
• Mississippi - The Department of Revenue stated in a 6/21/18 release that it is studying the Wayfair ruling to determine its effect in the state. "It is our belief this will create a more level playing field for Mississippi businesses that compete with online sellers." The DOR reminds sellers with out a physical presence in the state that existing state law requires those with sales in excess of $250,000 in the prior 12-month period to register and collect sales tax. Also see DOR "Sales and Use Tax Guidance for Online Sellers" updated for the Wayfair decision.
• Montana - Has a website explaining the effect of Wayfair on its residents and in-state businesses. Montana does not itself impose a sales tax. They suggest that in-state vendors "seek competent legal advice on how to proceed with collecting and remitting sales tax for sales tax states such as South Dakota."
• Nebraska - On 7/27/18, the DOR issued a news release with reminders to consumers to pay use tax when not charged sales tax, to certain remote sellers to check state law (Neb. Rev. Stat. 77-2701-13) to see if they must register to collect sales tax, and to in-state sellers that they may have new collection obligations in other states. State law includes affiliate ownership, and various in-state connections. It also includes that engaged in business includes soliciting orders in a "continuous, regular, seasonal, or systematic" manner where the "retailer benefits from any banking, financing, debt collection, or marketing activities occurring in this state or benefits from the location in this state of authorized installation, servicing, or repair facilities." Also see the DOR FAQs on the Wayfair decision. So, watch for any action by the legislature to adopt South Dakota-type legislation.
  
  LB 284 (signed 3/21/19) uses the SD thresholds and adds marketplace facilitator collection requirements. See text.
• Nevada - The Nevada Tax Commission released a draft regulation on 7/17/18 (R189-18) that basically adopts the SD threshold for a remote vendor to be subject to sales tax obligations in the state. A revision was released 8/9/18. See actions and timeline posted here.
• New Hampshire - Governor Sununu news release of 6/28/18 to fight the decision. Another press release of 8/23/18 lists executive actions underway including helping in-state businesses avoid scams where a thief posing as a state collector tries to get money or sensitive customer data from them. NH doesn't impose a sales tax.
  
  On 7/19/19, Governor Sununu signed SB 242 (Chapter 280) presenting an approach to try to fight other states imposing collection duties on NH sellers. The summary of this legislation states that it provides "for protection of private customer information and rights of New Hampshire remote sellers in connection with certain foreign sales and use taxes." SB 242 provides that other states must first provide notice to the NH Dept. of Justice before requesting private customer information, performing exams, or imposing sales and use tax collection obligations on NH sellers. A commission is established to monitor federal and state law changes and proposals regarding tax collection obligations on NH remote sellers. Section 2 of SB 242 takes effect 11/1/20 and the rest takes effect on 7/19/19. It is not clear from the text what "Section 2" is. See Governor Sununu news release on signing SB 242.
  
  See 8/29/19 explanation from the NH Dept. of Revenue. The state also has a website developed by the New Hampshire Department of Business and Economic Affairs, Division of Economic with additional information.Development
• New Jersey - legislation is pending. Also, on 8/14/18, the NJ Division of Taxation issued a notice that effective 10/1/18, consistent with the Wayfair decision, remote vendors meeting the SD thresholds in NJ must register and collect sales tax. FAQs.
• New York - Per the Dept. of Taxation and Finance website, a vendor is subject to sales tax collection if in the immediately preceding four sales tax quarters, their cumulative total gross receipts from sales of tangible personal property delivered into NY exceeded $300,000, AND the vendor made over 100 sale of tangible personal property delivered into NY. Also see N-19-1 (Jan. 2019) on sales tax registration for businesses without a physical presence in the state.
  
  S01509C and A02009-C (signed 4/12/19; Chapter 59) - adds marketplace provider collection requirement.
• North Carolina - Sales and Use Tax Directive 18-6 (8/7/18) - The DOR will apply the Wayfair decision prospectively starting 11/1/18. By "Court's ruling in the Wayfair decision," the DOR means application of collection obligations to remote sellers with gross sales exceeding $100,000 or 200 or more separate transactions in the prior or current calendar year. Such sellers must register 11/1/18 or 60 days after they meet the threshold, whichever is later.
  
  SB 56 (signed 3/20/19) adopts the DOR thresholds.
• North Dakota – The Tax Commissioner states that remote sellers must now follow ND’s law enacted in 2017 (SB 2298; 4/10/17) that is similar to that of South Dakota. At 6/25/18, the website states that it is a “work-in-progress” and more information will be added later.
• SB 2298 included a “contingent effective date” provision: “This Act becomes effective on the date the United States Supreme Court issues an opinion overturning Quill v. North Dakota, 504 U.S. 298 (1992), or otherwise confirming a state may constitutionally impose its sales or use tax upon an out-of-state seller in circumstances similar to those specified in section 1 of this Act.”
• SB 2191 enacted 3/14/19 removes the 200 transaction requirement effective for tax years beginning after 2018.
• SB 2338 enacted 3/27/19 imposes collection obligations on marketplace facilitators effective 10/1/19.
• Ohio - Dept. of Taxation memo on Substantial Nexus and Marketplace Facilitator Changes in light of HB 166 taking effect 8/1/19.
• Oklahoma - The State Treasurer's June/July 2018 Economic Report includes an overview of the Wayfair case. It also reminds readers that the effect of the decision is "not a tax increase, but a tax compliance issue." It also notes the benefit to cities, estimated at about $112 million annually. See Oklahoma Tax Commission's FAQs. The state's economic nexus rule goes into effect 11/1/19.
• Pennsylvania - Sales and Use Tax Bulletin 2019-01 (7/1/19) - Maintaining a Place of Business in the Commonwealth - basically, the state uses the $100,000 gross sales threshold and explains how that level applies for marketplace facilitators and marketplace sellers. Also see the DOR's sales tax, economic nexus and Wayfair website + information on marketplace facilitator rules.
• Rhode Island - The Dept. of Revenue issued an advisory on 6/27/18 to remind remote vendors of registration options. RI is a member of the Streamlined Sales and Use Tax System. The advisory doesn't state though which vendors need to register. Also see DOR Pub 2018-06 (7/6/18) with FAQs for remote sellers. DOR ADV 2018-29 (7/23/18) provides additional information for non-collecting retailers.
• South Carolina - On 8/10/18, the DOR released three draft rulings. Draft SC Revenue Ruling #18-x, Retailers Without a Physical Presence ("Remote Sellers") - Economic Nexus, effective for sales made on or after 10/1/18, sellers meeting a $250,000 economic nexus standard must register and collect sales tax. Draft SC Revenue Ruling #18-x, Online Marketplaces - Physical and Economic Nexus, provides information for marketplaces and sellers using them as well as the relevance of the litigation involving Amazon. The third ruling, Draft SC Revenue Ruling #18-x, Persons Using Another Person's Online Marketplace To Sell Their Products - Registration and Tax Collection Guidance. On 8/21/18, another draft ruling was released: Draft SC Revenue Ruling #18-x, Local Sales and Use Taxes and Catawba Tribal Sales and Use Tax.
• South Dakota - On 10/31/18, Governor Daugaard and Attorney General Jackley announced a settlement with Wayfair, Overstock.com and Newegg where these companies would start collecting sales tax on 1/1/19. Other remote vendors subject to the SD law were required to start collecting 11/1/19! See the Dept. of Revenue's website about the state's famous economic nexus law.
  
  Information on remote sellers and marketplace providers + FAQs.
• Tennessee - Sales and Use Tax Notice #18-11 (August 2018) states that its economic nexus rule is not enforceable until the General Assembly reviews the Wayfair decision. "However, the Department encourages these dealers to voluntarily collect and remit the tax as a convenience to their customers." The notice states that the economic nexus rule (Rule 129(2)) will not be applied retroactively.
• Texas - Comptroller Hegar announced 6/27/18 his office would study the situation with input from the public and lawmakers. He suggested there would be no retroactive application. STAR ruling 201807004L (7/5/18) summarizes the Wayfair decision, notes what the Comptroller is doing, and offer suggestions for the stat legislature. On 10/19/18, proposed rules were issued (see page 24, et seq). A threshold of over $500,000 of sales in a year is proposed with no transaction test. Also, once the seller crosses the threshold, it has three months before starting to collect. Vendors who cross the threshold now, start collecting 10/1/19.
  
  In November 2018, SB 70 was introduced calling for a single statewide local tax rate for remote vendors.
  
  See more news in the December 2018 Comptroller's newsletter.
  See Comptroller's website on Wayfair for sellers.
  
  Texas has proposed via a proposed regulation change from the Comptroller (August 2019) to use the same nexus threshold for its franchise tax. Because this is not a net income tax, P.L. 86-272 does not apply.
• Utah - SB 2001 enacted after the Court's decision in Wayfair, follows the South Dakota thresholds, effective for sales on or after 1/1/19. This new law repeals the 18% discount Utah had been offering to remote sellers who voluntarily collected the state's sales tax.
• Vermont - The Dept. of Taxes announced that the Court's decision makes Act 134 (2016) effective. That law is similar to that of SD affecting out-of-state vendors that made at least $100,000 or sales or 200 individual transactions in any prior 12-month period.
• Virginia - HB 1722 (Chapter 815; 3/26/19), effective 7/1/19 imposes the over $100,000 gross revenue or 200 or more separate retail sales transactions threshold, as well as marketplace facilitator collection obligations. SB1083 (Chapter 816; 3/26/19) effective 7/1/19 is similar and discusses liability relief for facilitator if collects wrong amount of tax.
  
  Guidelines for Remote Sellers and Marketplace Facilitators from DOT, effective 6/27/19.
• Washington - The DOR website notes that starting 10/1/18, the South Dakota threshold will apply. If the remote seller only sells through a marketplace facilitator, different rules apply. In addition, starting 1/1/18, remote sellers and marketplace facilitators with $10,000 or more in retail sales in-state must either register their business and collect sales tax or follow the use tax notice and reporting requirements. However, it cautions that any business meeting the SD thresholds must start collecting (and register) starting 10/1/18.
  
  SSB 5581 signed 3/14/19 removes the 200 transaction and just uses the over 4100,000 of sales for nexus.
• Wisconsin - The DOR website states that starting 10/1/18, remote vendors will have to start collecting sales tax from Wisconsin customers if they meet the new standards that match the SD thresholds. The website also has a set of FAQs. Also see DOR's Statement of Scope regarding work needed.  The Legislative Fiscal Bureau reports in a 7/2/18 memo that if the state changed its law to follow SD law, it would generate an additional $120 million per year. It also notes that state law likely needs to be changed to specify a threshold for "an electronic nexus threshold." The memo also notes that a law change in 2013 states that additional sales and use tax revenues generated from "any federal law" expanding the ability of the state to impose sales tax obligations on remote vendors is to be used to reduce income tax rates. 
• Wyoming - The DOR issued a memo reminding readers that the state has an economic nexus rule similar to that of SD. The DOR is studying the decision's "impacts" to determine a "date certain for licensing deadline." The rule will be enforced prospectively only. 

States with South Dakota type laws will need to issue guidance on the effective date and how to measure the $100,000 sales and 200 transaction thresholds (or other thresholds specified by the state). For example, do sales of tax-exempt items count?

Have you checked the existing sales tax nexus/jurisdiction law in states where you or clients have nexus per the South Dakota standard? As standards differ among states, some states have not yet said anything about their response to the Wayfair decision, and after the decision, e-commerce vendors are more likely to have new sales tax obligations. Such vendors should consider a system that enables them to track the number of transactions in each state and the dollar amount to better identify when new collection obligations arise or to consider not making certain sales if they want to reduce the number of states in which they have collection and filing obligations.

What do you think?