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5 Key Takeaways from the Wayfair Decision

6/11/19 – Robin Teeters

In June of 2018, the world of sales tax nexus was changed forever by the United States Supreme Court’s decision in South Dakota v. Wayfair.  The standardization efforts of a group of states under the Streamlined Sales Tax Project were rewarded, and the long established, physical presence standard was no longer the law of the land.  States were now permitted to force the collection of sales tax based upon the measure of economic presence in the state.

The initial impact of the Wayfair decision left an abundance of uncertainty:  What type of “sale” and how much of it created an economic presence and, therefore, a collection obligation?   How soon would taxpayers need to comply?  Did it apply to local taxes as well?  Would all return filing be done on-line?  What should we do first?  How do we prove that we are not required to collect tax?  Does Wayfair apply to gross receipts, income or franchise taxes as well? What about potential past liability?  Is there any software to help me calculate the tax or file the returns?  These are only a few of the questions raised by the Wayfair decision.

The second impact of the decision involved substantial activity by the states. While new legislation was passed in some states, explanations of existing legislation were provided in others and, after months of daily updates from various states, nexus questionnaires and accusing letters began to surface.  Keeping up with all the communications and activities has been quite the challenge but, here we are, nearly a year out, and we are inviting you to hear our insights.

Five things we have learned since the Wayfair decision:

  1. Wayfair did not make things as simple as we would have preferred.
  2. Not all states have taken the Wayfair decision to heart.
  3. Auditors are people too, and they can be quite reasonable if the right facts are presented.
  4. Automated solutions exist but are not one-size-fits-all, so due diligence is required.
  5. The states were not ready for Wayfair, but they are catching up now.

Interested in learning more about what’s occurred since the decision came down last June? If so, register for our upcoming event on July 18th.