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Wayfair decision on sales tax
In case you did not hear, the supreme court handed down a very pro-state decision regarding sales tax today. The Wayfair decision as it will be know gives states a very broad ability to determine nexus for sales tax.
As you may already know many states including Michigan have been stepping up enforcement of sales tax collection.
The supreme court decision today (Wayfair decision) is a watershed moment for anyone selling goods online. No longer will you be required to have a physical presence in a state before the state can enforce sales tax collection. The State would only need to determine that a business has a substantial amount of product sales, as the state is able to determine. Every state on a state by state basis can determine how they will choose to impose sales tax collection activity moving forward. This is obviously important for online sellers, but also service providers should be cautious.
Some states also impose taxes on services. While they have not mentioned this in the decision, many states may be able to use this decision to extend their service taxes to include out of state vendors whom provide services within states. We know that many states used the “old” Quill decision to determine nexus and applied those rules to service taxes. Now with the new Wayfair decision we believe that states should be able to update their own Nexus standards relating to service providers.
If you would like to read a more in depth article on the matter, we have attached a link to a good one here:
com/news/supreme-courts- wayfair-tax-decision- sidelines-quill?utm_campaign= breaking-news-c-Jun%2021% 202018&utm_medium=email&utm_ source=newsletter&eid= ceb30b3a0c648ba935e6da5c6ef2a0 af
Also, if you have any questions about Sales taxes, service taxes or want to talk about the best dish to bring to your fourth of July party, reach out to us.