The legal battle is over for the parties in South Dakota v. Wayfair, Inc. The Supreme Court’s decision that South Dakota was correct in requiring remote sellers to collect South Dakota sales taxes was decided June 21, 2018. However, the Justices decided that the lower court handle the specific settlement terms.
The November 1, 2018 Wayfair settlement agreement terms are as follows:
- Removes the injunction; and
- Sets January 1, 2019 as the date the defendants must comply with the remote seller law.
The injunction prevented the state from applying the remote seller law against the defendants.
South Dakota’s remote seller nexus laws require all remote sellers, except the Wayfair defendants, to comply with the following by November 1, 2018. The settlement agreement requires the defendants to comply by January 1, 2019. The lower court could have increased or decreased the remote seller thresholds but conformed to them. This is definitely a relief to the 30 plus states which have enacted similar remote seller thresholds since June.
Remote sellers that have:
- More than $100,000 in sales into South Dakota; or
- Have 200 or more separate sales into South Dakota.
A remote seller is a business located in another state that lacks a physical presence in South Dakota but makes sales to South Dakota consumers. Gross sales or transactions include the sales of tangible personal property, any products transferred electronically, or services.
As a business owner, the questions you should be asking are:
“When and where should I be filing in new states?” Once that’s answered, “how do I register, collect and remit the taxes?”
If you have questions regarding how this case may impact your business sales & use tax compliance, please contact Cam Brawley Director of SALT Services with Wegner CPAs.
About the Author
Cam Brawley, CPA is the Director of State and Local Tax (SALT) Services for Wegner CPAs. He joined the firm in 2016 with more than 30 years of state and local tax experience. He specializes in multi-state income, sales & use, property taxes, and unclaimed property. He has experience with large and small businesses with extensive expertise in manufacturing, supply chain, retail/wholesale and technology companies.