Multistate: States continue to respond to the wayfair decision

States have continued to issue guidance since the recent U.S. Supreme Court decision in South Dakota v. Wayfair.

Podcast Overview

States have continued to issue guidance or statements since the recent U.S. Supreme Court decision in South Dakota v. Wayfair. Just recently, The Comptroller of Maryland issued a Tax Alert explaining that taxpayers should review the Court’s decision in Wayfair to identify how it affects them. The Comptroller, while indicating it will provide additional guidance, explained Maryland imposes a sales tax collection requirement as broadly as is permitted under the U.S. Constitution.

The Minnesota Department of Revenue issued a release indicating it plans to announce on July 25, 2018 the date by which it will require remote sellers and marketplace providers to collect and remit applicable sales or use tax on sales delivered into the state. Recall, Minnesota, in 2017, passed legislation requiring remote sellers and marketplaces meeting certain thresholds to collect tax on sales into the state, with the statute becoming effective the earlier of an overturn of Quill by the U.S. Supreme Court or January 1, 2019.

New Hampshire legislators have assembled draft legislation to be introduced in a July 25, 2018 special session that, if enacted, would impede other states from imposing a sales and use tax collection obligation on New Hampshire remote sellers. Notably, the bill would prohibit foreign taxing jurisdictions, as defined, from requesting information from, conducting examinations of, or imposing sales and use tax collection obligations on sellers in New Hampshire, unless the foreign taxing jurisdiction registers and provides notice to the New Hampshire attorney general. Before allowing such an examination to go forward, the Attorney General would be required to determine that the laws of the foreign jurisdiction met the requirements of the U.S. and New Hampshire constitutions, including a safe harbor for small sellers, a prohibition against retroactive application of any collection requirement and membership in Streamlined Sales and Use Tax Agreement, or substantial compliance with the individual provisions thereof. The bill would also prohibit sellers in New Hampshire from providing private customer information to any foreign taxing authority for purposes of determining liability for collection of certain sales or use taxes unless the seller has provided a written notice of the request for such information to the attorney general. The bill would, however, allow sellers to comply with any directive of a foreign taxing authority, while preserving the seller’s rights under the statute, if the seller determines that such compliance is in the seller’s best interest.

In Utah, Senate Bill 2001 was approved by lawmakers in a second special session. If signed into law, this bill would impose a sales and use tax collection and remittance obligation on remote sellers receiving gross revenue of more than $100,000 from the sale of tangible personal property, any product transferred electronically, or services for storage, use, or consumption in Utah, or has 200 or more separate transactions from such sales. The provision establishing the new thresholds for a collection and remittance obligation would become effective January 1, 2019. Part of the expected revenue from the change will be used to expand the scope of certain aspects of the state’s manufacturing machinery and equipment exemption.

In congressional news, Rep. Bob Goodlatte confirmed, in a statement to the tax press, that the House Judiciary Committee will hold a hearing (possibly the week of July 23) to discuss sales and use tax collection obligations imposed on remote sellers, including whether the Committee would support legislation limiting states’ ability to impose a sales and use tax collection requirement on remote sellers. It is not clear whether the Committee will discuss specific legislation such as Stop Taxing Our Potential (STOP) Act or No Regulation Without Representation Act of 2017 (NRRA). Please stay tuned to TWIST for more updates on Wayfair.

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