Due to the recent Supreme Court Ruling: SOUTH DAKOTA v. WAYFAIR,
INC., ET AL. all online orders, regardless of the bill to or the ship to may be subject to State and Local Sales Tax.
***Please note that this is a very recent development and Express Systems & Peripherals is working diligently to ensure our compliance with the emerging tax laws spawning from this Supreme Court Ruling.
Please ensure that all orders, regardless of the bill to or ship to are accompanied by valid tax certificates. If your company does not have a valid resellers permit or valid tax exemption, your order may be charged Sales Tax.***
Economic Nexus is the new term when determining whether or not online sales are subject to state and local taxes.
Now, not only does physical presence (such as a location,
employee or inventory), but ďeconomicĒ presence in a state creates sales tax
Due to the Wayfair ruling, even if you do
not have a physical presence in a state, if you pass a stateís economic
threshold for total revenue or number of transactions in that state, youíre
legally obligated to collect and remit sales tax to that state.
State laws on economic nexus vary.
A summary of the Supreme Court Case is below:
SOUTH DAKOTA v. WAYFAIR, INC., ET AL.
Should this Court abrogate Quill's sales-tax-only, physical-presence requirement?
Majority Opinion: Justice Kennedy
In two earlier cases the Court held that an out-of-state sellerís liability to collect and remit the tax to the consumerís State depended on whether
the seller had a physical presence in that State, but that mere shipment of goods into the consumerís State, following an order from a catalog,
did not satisfy the physical presence requirement. National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967);
Quill Corp. v. North Dakota, 504 U. S. 298 (1992).
The central dispute is whether South Dakota may require remote sellers to collect and remit the tax without some additional connection to the State. (p.10)
Quill puts both local businesses and many interstate businesses with physical presence at a competitive disadvantage relative to remote sellers.
Remote sellers can avoid the regulatory burdens of tax collection and can offer de facto lower prices caused by the widespread
failure of consumers to pay the tax on their own. (p.12-13)
Rejecting the physical presence rule is necessary to ensure that artificial competitive advantages are not created by this Courtís precedents.
This Court should not prevent States from collecting lawful taxes through a physical presence rule that can be satisfied only if there is an
employee or a building in the State. (p. 13)
Modern e-commerce does not align analytically with a test that relies on the sort of physical presence defined in Quill. (p. 14)
This Court should not maintain a rule that ignores these substantial virtual connections to the State. (p. 15).
The physical presence rule it defines has limited Statesí ability to seek long-term prosperity and has prevented market participants
from competing on an even playing field. (p. 17)
Decision: For these reasons, the Court concludes that the physical presence rule of Quill is unsound and incorrect.
The Courtís decisions in Quill Corp. v. North Dakota, 504 U. S. 298 (1992), and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967), should be, and now are, overruled. (p. 22)
The judgment of the Supreme Court of South Dakota is vacated, and the case is remanded for further proceedings not inconsistent
with this opinion. (p. 23-24)
The Supreme Court of the United States (October 2017). SOUTH DAKOTA v. WAYFAIR, INC., ET AL. No. 17Ė494.
Argued April 17, 2018óDecided June 21, 2018. Retrieved from: