State governments have continued to issue guidance or statements since the June 2018 decision by the U.S. Supreme Court in “South Dakota v. Wayfair, Inc.”
In Wayfair, the U.S. Supreme Court overruled the physical presence nexus standard of Quill and National Bellas Hess with respect to state and local taxation of remote sales. Soon after the Supreme Court issued its decision in Wayfair, various states began issuing guidance or statements or began steps to introduce legislation in response to the decision in the Wayfair case.
Two more states have responded to the Court’s decision—New Jersey and South Carolina.
The New Jersey Division of Taxation last week announced that effective October 1, 2018, remote sellers meeting South Dakota-style thresholds (over $100,000 of gross revenue from the sale of tangible personal property, specified digital property, or services into New Jersey; or 200 or more separate transactions for delivery into New Jersey in the prior or current calendar year) must register, collect, and remit New Jersey sales tax.
After the Wayfair decision was released by the U.S. Supreme Court, New Jersey lawmakers passed sales and use tax economic nexus legislation. However, the governor has not acted to sign the bill (Assembly Bill 4261).
The South Carolina Department of Revenue in August 2018 released three drafts of revenue rulings addressing the Wayfair decision and how the decision could apply with respect to remote sellers, online marketplaces, and sellers that are using online marketplaces. Comments about the drafts are due by August 27, 2018. In all three draft rulings, the Department makes clear that it views marketplaces as a retailer of all tangible personal property sold on a marketplace’s website. This is consistent with the Department’s position in pending litigation (the Department has asserted that marketplaces are the equivalent of consignment sales, and as the consignee, the marketplace is the retailer of the item sold).
Read an August 2018 report prepared by KPMG LLP
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