States have continued to issue guidance or statements since the recent U.S. Supreme Court decision in South Dakota v. Wayfair. Currently, the South Dakota Department of Revenue is enjoined from enforcing the state’s economic nexus law until the state-level Wayfair litigation is resolved. The state appears to be taking steps to be able to enforce its law sooner. South Dakota Governor Daugaard informed the Tax Press he will call a special session on September 12, 2018 to “fight for tax fairness.” The Governor also stated he supports an enforcement date of October 1, 2018. On August 9, 2018, the South Dakota Supreme Court remanded Wayfair back to the State Circuit Court, which means the Circuit Court may now conduct further proceedings and/or dissolve the injunction.
On August 6, 2018, the Maryland Comptroller’s office provided a draft regulation to the Joint Committee on Administrative, Executive, and Legislative Review that would amend the definition of “out-of-state vendor” to include a remote seller whose gross revenue exceeds $100,000 or has 200 or more separate transactions, in the previous or current calendar year, from the sale of tangible personal property or taxable services to in-state customers. The regulation proposes that the new definition will be effective October 1, 2018.
On August 6, 2018, the Mississippi Department of Revenue issued guidance explaining that effective September 1, 2018, it will enforce the state’s economic nexus statute for remote sellers exceeding the state’s small seller exception (annual sales in excess of $250,000). Remote sellers will need to register with the DoR by August 31, 2018 and begin collecting Mississippi use tax for sales made on or after September 1, 2018.
On August 7, 2018, the Little Rock Board of Directors passed a resolution asking Arkansas Gov. Hutchinson to call a special session to consider remote sales tax legislation “as quickly as possible.” However, the Governor’s office informed the Tax Press there are no plans to hold a special session to consider any legislation. A legislative tax reform task force has recommended consideration of a measure to establish an economic nexus threshold of $100,000 in receipts or 200 transactions.
On August 7, 2018, the North Carolina Department of Revenue published Directive SD-18-6 requiring all remote sellers with over $100,000 of gross sales sourced to North Carolina or 200 or more separate transactions sourced to North Carolina in the current or previous calendar year to collect and remit sales and use tax. The requirement is effective November 1, 2018 or 60 days after a remote seller meets the threshold, whichever is later The DoR will not apply this obligation retroactively.
On August 7, 2018, the Wyoming Department of Revenue explained that, due to ongoing litigation, it is currently not requiring remote sellers meeting the state’s economic nexus thresholds (over $100,000 of Wyoming sales or 200 separate transactions for delivery into Wyoming) to register for collection and remittance of sales and use tax. Once an enforcement date is established, this information will be posted to the DoR’s website.
On August 8, 2018, Maine Revenue Services issued a Tax Alert explaining, for sales made on or after July 1, 2018, it will enforce the state’s economic nexus statute that has been effective since October 1, 2017. Maine Revenue Services explained that remote sellers will be subject to assessment on sales made on or after July 1, 2018 for which the seller did not collect or remit applicable sales and use taxes. Maine Revenue Services has created a webpage directing remote sellers to registration forms, the state’s voluntary disclosure program, and other guidance documents.
On the West Coast, draft legislation has been circulated in California that would implement the Wayfair holding. As drafted, the definition of “retailer engaged in business” is amended to include “any retailer that, in the preceding calendar year or the current calendar year, has a cumulative sales price from the sale of tangible personal property for delivery in this state that exceeds five hundred thousand dollars.” A “retailer” would include online marketplaces, and marketplaces meeting the threshold would be required to collect and remit on behalf of marketplace sellers not registered with the California Department of Tax and Fee Administration.
Finally, the Secretary of the Louisiana Department of Revenue, in her role as Chair of the Louisiana Sales and Use Tax Commission for Remote Sellers, issued Remote Sellers Bulletin 18-001 containing guidance in the implementation of Wayfair. The Bulletin indicates that the Supreme Court’s determination in Wayfair is sufficient to effectuate the economic nexus statute (with thresholds of $100,000 in receipts or 200 transactions) that was passed in the 2018 special session of the legislature. The Bulletin then indicates that the Commission for Remote Sellers, in the Department of Revenue, will serve as the sole point of collection for remote sellers and will not enforce the collection obligation for any periods prior to January 1, 2019. Finally, the Bulletin notes that the law passed in 2016 requiring remote sellers to collect tax or file various use tax reports would remain in effect for those sellers that do not voluntarily register with the Commission and for those that do not meet the economic nexus thresholds.
Please stay tuned to TWIST for more Wayfair—related updates.