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Tax Trap: Is Your Business Collecting Sales Tax for Sales In Other States?

The June 2018 Wayfair Supreme Court decision allows states to require out-of-state businesses without a physical presence in a state to collect sales tax if they have economic nexus to a state.

 Around 37 states (out of the 45 states with a sales tax) have adopted economic nexus rules.

 California’s rules are effective April 1, 2019 and I will post these rules later this month.

 

Many states require sales tax collection if in current or prior year:

(a)   Sales over $100,000 in state

(b)   Over 200 transactions in state (including nontaxable transactions)

Certain states have said they will start enforcing this law as of January 2019.

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Richard Pon CPA, CFP