State lawmakers continue to enact legislation and issue guidance in response to the U.S. Supreme Court’s decision in South Dakota v. Wayfair. A rapidly increasing number are imposing the tax collection obligation on what they are terming “marketplace facilitators” or “marketplace providers.” Below is a summary of the remote seller and marketplace collection legislation that advanced or was signed into law last week.
Indiana’s budget bill, House Bill 1001, which was signed on April 29, 2019, requires marketplace facilitators to collect and remit sales tax if (1) their gross revenue from sales of tangible personal property or services (including lodging and accommodations) delivered into Indiana, or products transferred electronically into Indiana, exceeds $100,000, or (2) the marketplace has 200 or more separate transactions involving services, tangible personal property, or electronically transferred products for delivery into Indiana. These provisions are effective July 1, 2019. In Kansas, House Bill 2033 has been presented to the Governor for action. This bill includes economic nexus provisions for marketplace facilitators and remote sellers that would become effective October 1, 2019. The Kansas bill includes numerous other sales and income tax changes, and the Governor vetoed a similar bill earlier this year. In Colorado, House Bill 1240 has passed both houses of the legislature and has been prepared for presentation to Governor Polis. The bill, if enacted, would require certain marketplace facilitators with Colorado sales exceeding $100,000 to begin collecting on October 1, 2019. The bill also codifies the Department’s destination based sourcing rules.
In other news, the Georgia Department of Revenue issued Policy Bulletin SUT-2019-02, which provides guidance on recently-enacted House Bill 182. Recall, House Bill 182 eliminated the “collect or report” option available to certain remote sellers and reduced the dollar nexus threshold from over $250,000 in gross revenues from Georgia retail sales to $100,000 in gross revenues from retail sales. The elimination of the reporting option was effective April 28, 2019, and the lowering of the economic nexus threshold is effective January 1, 2020. In addition to summarizing the new legislation, the guidance clarifies that remote sellers meeting the current law threshold of $250,000 in retail sales or 200 transaction that may have chosen to comply with the use tax notice and reporting requirements in 2019 can no longer continue to do so. These remote sellers have an obligation to begin collecting and remitting sales tax on taxable sales on or before July 1, 2019. Please stay tuned to TWIST for future Wayfair related updates.