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Tax Blog

Uncertainty Around Wayfair?

People who pay close attention to the news may have noticed, the Supreme Court recently destroyed a previous ruling that set a physical nexus for a state to collect sales taxes from remote vendors. The decision of South Dakota v. Wayfair changed all that, the Supreme Court ruled that it was unrealistic and unnecessary to require a physical nexus in order for a state to tax a remote vendor. Instead of the physical nexus, South Dakota had implemented (as well as several other states) an economic nexus.

The interesting part of the case and where the uncertainty lies, is that the Supreme Court has not actually specifically held that South Dakota’s law is valid. This is not to say the Court won’t formally declare the law valid (they are expected to affirm the law in August), but really this is to provide a warning to pump the brakes on current expectations regarding taxation of remote vendors.

Currently, there exists a coalition of states that adhere to the Streamlined Sales and Use Tax Agreement. Many other states are in deliberations to join the agreement because of the agreement’s simplicity and aim to prevent discrimination and undue burdens on entities.

With the major change and looming uncertainty of where the new tax laws may fall, it’s certainly best for your business to stay up to date. If you have questions regarding how your business may be affected by the tax changes, contact us at the Center for Financial, Legal & Tax, Inc.

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