Demystifying the Impact of the Wayfair Decision
2018 was an unforgettable year, especially in the area of sales tax compliance. When the US Supreme Court announced its decision in the South Dakota v. Wayfair, Inc. case, it was truly a tax compliance “earthquake”. However, 2019 and beyond will be the year(s) of the reverberating “aftershocks”.
Change is happening everywhere
Currently, businesses are being forced to keep up, as individual states forge ahead in setting their own nexus rules. And with this dizzying degree of change, remaining sales tax compliant is no easy matter. It is in response to these complex effects of Wayfair that Wolters Kluwer Tax & Accounting announces a new “Post Wayfair Aftershocks” article series that will look at new developments resulting from this historic decision and explore its key implications on those conducting business in the United States.
How it started
In June 2018, the US Supreme Court announced its decision in the South Dakota v. Wayfair, Inc. case. This ruling overturned the 1992 Quill, Corp. v. North Dakota nexus holding that a company must have a physical presence in a state before being held liable for the collection and remission of sales and use taxes, as well as, the obligation to register and file returns in that state.
The current state of change
“In the months since the decision, many states have moved to change their definition of Economic Nexus, with most, if not all, expected to enact and implement changes before the end of 2019,” said Mark Friedlich, Senior Director, Global Content Assets, Wolters Kluwer Tax & Accounting, North America. “Individual approaches by states and varied start-collection dates will require businesses to navigate differing sales and use tax obligations across more states than ever before.”
These obligations and business challenges include:
- Requirements for businesses to register, keep records, as well as to collect and remit sales and use taxes in many states where firms lack a physical presence
- Conditions not only in the retail online and brick-and-mortar sector, but in other sectors up and down the supply chain, including wholesale, manufacturing, and construction
How does Wayfair apply to certain sectors?
Over the next couple of months, the Post Wayfair Aftershocks series will examine key aspects coming from this landmark decision. Topics will range from how it applies to new technologies and the taxation of cloud-based services to non-retail exemption certificate management. Hot topics such as the taxation of cannabis products, will also be covered. Written by sales and use tax experts from Wolters Kluwer Tax & Accounting, the articles will provide the in-depth analysis and guidance that businesses and tax & accounting professionals need to help them better navigate the increasingly complex landscape and ensure compliance across jurisdictions where their customers purchase goods and services.
Stay informed, stay current
The Wolters Kluwer Sales Tax Nexus resource page includes resources to stay current with rapidly changing nexus standards across the country. CCH® SureTax® provides businesses with real-time, accurate multi-vertical tax calculation and report solutions. With industry specific taxability content and rules, CCH SureTax supports the most complex sourcing and tax calculation rules found in communications, energy and general sales and use, while providing a scalable platform for growth.
To view the complete press release related to this announcement, click here.
About Wolters Kluwer
Wolters Kluwer (WKL) is a global leader in professional information, software solutions, and services for the healthcare; tax and accounting; governance, risk and compliance; and legal and regulatory sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with advanced technology and services.
Wolters Kluwer reported 2018 annual revenues of €4.3 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 19,000 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.
Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt (ADR) program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).
For more information, visit www.wolterskluwer.com, follow us on Twitter, Facebook, LinkedIn, and YouTube.