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What you need to know about the Supreme Court's Wayfair decision

June 27, 2018
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We recently hosted a webinar – What You Need To Know About The Supreme Court’s Wayfair Decision. You can listen to a replay of the webinar here and download the presentation here

The webinar covered the following objectives:

  • A better understanding of the Wayfair decision;
  • How the decision could potentially affect your business; and
  • Potential options on what your company should do in the short term.

Specifically we discussed 3 potential short-term options:

  1. Start registering everywhere for sales tax;
  2. Don’t register anywhere and let the state(s) catch the business; and
  3. Do “The Wayfair Analysis”

Option 3 – The Wayfair Analysis – should provide your company with the best information to make an informed decision on how to address the effects of Wayfair on your business.

While the webinar outlined how to conduct The Wayfair Analysis, please keep in mind:

  1. There are numerous aspect of the analysis that are subjective.
  2. Every day new information is coming out on how states are responding to Wayfair that can significantly affect the analysis.  For example, the following is a sample of announcements made by certain states:

Vermont - Vermont has announced that as a result of the Supreme Court decision in Wayfair, vendors are now required to register with Vermont and collect and remit sales tax beginning July 1, 2018. "Vendor" is defined as a person making sales of tangible personal property from outside Vermont to a destination within Vermont and not maintaining a place of business or other physical presence in Vermont that: 

  1. engages in regular, systematic, or seasonal solicitation of sales of tangible personal property in Vermont by the display of advertisements, distribution of catalogues, periodicals, advertising flyers, or other advertising by means of print, radio, or television media; or by mail, Internet, telephone, computer database, cable, optic, cellular, or other communication systems, for the purpose of effecting sales of tangible personal property; and 
  2. has either made sales from outside Vermont to destinations within Vermont of at least $100,000, or totaling at least 200 individual sales transactions, during any 12-month period preceding the monthly period.

South Dakota - South Dakota Department of Revenue is taking the next steps in implementing its 2016's remote seller taxation law. While the U.S. Supreme Court's decision was in South Dakota's favor, a State Circuit Court injunction prevents immediate implementation of a 2016 law which requires online sellers without a physical presence in South Dakota to collect and remit sales tax. Because the U.S. Supreme Court set aside the previous decision of the South Dakota Supreme Court, the case will return to the South Dakota court system for further legal proceedings. The Department of Revenue expects that the U.S. Supreme Court will formally send its decision to the South Dakota Supreme Court in mid-July. The case will return to the State Circuit Court with the possibility for an August decision.

Massachusetts - The Massachusetts Department of Revenue has issued a statement that existing Mass. Regs. Code § 830 CMR 64H.1.7, Vendors Making Internet Sales (reported in State & Local Taxes Weekly, Vol. 28, No. 38, 09/18/2017), which took effect in October 2017, continues to apply and is not impacted by the U.S. Supreme Court’s recent decision in Wayfair.

If you have any question, please speak with your Citrin Cooperman contact or:

DAVID SEIDEN, CPA
Partner, Practice Leader - State and Local Tax
TEL 914.517.4447
dseiden@citrincooperman.com

EUGENE RUVERE, CPA, MST
State and Local Tax Partner
TEL 914.949.2990 x3375 
eruvere@citrincooperman.com

THOMAS WALSH, CMI
State and Local Tax Principal
TEL 212.225.9559
twalsh@citrincooperman.com