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Wayfair and remote sellers

On June 21, 2018, the United States Supreme Court ruled that a state may impose sales tax collection responsibilities on businesses that have no physical presence in the state (remote sellers). See South Dakota v. Wayfair, 138 S.Ct. 2080 (2018).

Due to this ruling, existing provisions in tax laws in many states immediately became effective and out-of-state businesses became obligated to collect sales taxes (primarily from online sales) and remit them to the states to which the products are shipped.

In the landmark case South Dakota v. Wayfair, the U.S. Supreme Court overturned the physical presence rule, which previously required businesses to have a physical presence in a state to be obligated to collect sales tax for transactions in that state. As a result of this ruling, South Dakota, along with other states, can require out-of-state sellers, including online retailers, to collect and remit sales tax on sales made to customers in South Dakota, even if the seller has no physical presence in the state. This applies to businesses that meet certain criteria, such as a minimum amount of sales or transactions within the state. The South Dakota law that was upheld by the Supreme Court sets these thresholds at $100,000 in sales or 200 transactions. Consequently, remote sellers must comply with South Dakota's sales tax regulations if their business activities exceed these thresholds.

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Taxes

Wayfair and remote sellers

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Wayfair and remote sellers

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