U.S. Supreme Court Decision Changes Sales Tax for Businesses Selling Out-of-State

On June 21, 2018 the US Supreme Court issued a decision that will impact all businesses who sell products or services outside of their home state. Prior to this decision (South Dakota v. Wayfair, Inc., et al) states were not permitted to require businesses to collect and remit sales tax if the business didn’t have a physical presence in the state. This was based on earlier court decisions that provided a big advantage to out-of-state businesses.

With the changing economy, many states felt that the prior rules were outdated and required a change. South Dakota was the state that made it to the Supreme Court. The Court’s decision allows states to impose sales tax on remote sellers regardless of whether they have a physical presence in the state.

What to expect next…
Hayashi Wayland is working locally and with our national alliance partner, RSM US, to digest the ruling and provide guidance to our clients. Based on this change we will monitor developments in state legislation to take advantage of the new standards. It is likely that many states will revise their filing requirements and will become more aggressive in pursuing non-filers.

What should your business be thinking about now?
Consider some of the follow questions in light of the decision:

  • What are your total sales, by state? How do you track this in your current accounting system?
  • Were you compliant with out-of-state sales tax filings based on the pre-decision guidelines?
  • Are any of the products or services you sell exempt from sales tax?
  • Will your business continue to expand your reach into new states in the future?

Adapting your business to the new sales and use tax landscape will take time, even though you may need to react quickly.  To learn more about how the Wayfair decision could affect your business, please read this alert from our alliance partner RSM US, U.S. Supreme Court kills Quill physical presence or contact your Hayashi Wayland tax advisor.


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