Wayfair Decision: Changing the Landscape of Sales Tax Collection
In a landmark ruling on June 21, 2018, the United States Supreme Court made a pivotal decision in South Dakota v. Wayfair, overturning longstanding precedent regarding state sales tax collection.
Pre-Wayfair Precedent: Physical Presence Requirement
Before the Wayfair decision, states could only mandate sales tax collection from sellers with a physical presence within their borders. This precedent restricted states’ ability to enforce sales tax collection from out-of-state sellers.
Wayfair Decision: A Paradigm Shift
The Wayfair decision reversed this precedent, allowing states to require out-of-state sellers to collect sales tax based on their economic activity within the state. This decision marks a significant departure from previous norms in sales tax regulation.
Implications for Sellers: Reviewing Sales Activities
As a result of the decision, sellers must now assess their sales activities in each state to determine if they meet the thresholds necessitating sales tax collection. This necessitates a comprehensive review of business operations and sales practices.
Contact Clarus Partners for Guidance
For assistance navigating the complexities of post-Wayfair sales tax compliance and determining your obligations, contact Clarus Partners. Our team is equipped to provide expert guidance tailored to your specific business needs.