Insights: Article

Sales Tax Reform: Impact of Wayfair Decision FAQ

August 21, 2018

Eide Bailly’s state and local tax team recently hosted a webinar providing an overview of the recent U.S. Supreme Court decision in the Wayfair case and how clients should be positioned to ensure compliance. The following frequently asked questions list gives insight regarding sales tax reform as the states address the impact of the Wayfair decision.

Which sales count towards the economic nexus thresholds?
Most states have not specified if sales to resellers or specific items, such as freight, count towards the threshold standards. Most states simply use the term “sales” and do not specify if sales to resellers count towards the thresholds. A conservative approach is to assume that all sales would count towards the thresholds.

Do individual items count towards the number of transactions?
Most states have specified the number of transactions for their threshold. In addition, most states have not defined what is a “transaction.”  We can only assume that they view an invoice as a transaction and not the individual items listed on the invoice.

Am I required to collect all local taxes in addition to state taxes?
Most states are requiring that remote sellers collect all applicable taxes including local taxes.  This should be addressed by the state if you are required to register. Learn more about current state positions

What time frame do I use to calculate thresholds?
Most states have specified calendar year 2017 as the first period or January 1, 2018, to current as the second period. If you met the threshold in 2017, you are expected to begin filing by the effective date. If you have not met the thresholds in 2017, but meet the thresholds during 2018, most states specify the number of days after reaching the threshold before reporting is required.

I no longer meet a threshold. How long until I can stop filing?
Based on state information available, once you have met a threshold, you are required to continue filing as long as you are in business

Once I meet a threshold are my previous sales subject to tax?
Typically, once a threshold is met, the tax liability is based on future sales, not historical sales.

Please contact your Eide Bailly professional or a member of our state and local tax team to learn more. If you are interested in a Sales Tax Risk Assessment, contact Laura Robichaud or David Casper. If you would like to listen in to the recorded webinar, click here.

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