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How States Responded to South Dakota v. Wayfair in 2018

Checkpoint Editorial Team  

· 28 minute read

Checkpoint Editorial Team  

· 28 minute read

Less than six months after the U.S. Supreme Court overturned the physical presence rule for sales and use tax nexus with its ruling in South Dakota v. Wayfair [1], the vast majority of states have enacted or announced economic nexus policies, and the trend continues into the end of the year.

Texas’ remote seller regulation establishes a $500,000 sales threshold and takes effect January 1, with enforcement to begin on October 1, 2019.[2] On December 12, after months of speculation, the California Department of Tax and Fee Administration unveiled its policy, which, like the South Dakota law at issue in Wayfair, looks to gross revenue from sales exceeding $100,000, or sales into the state made in 200 or more transactions, during the year.

Unlike South Dakota’s law, which counts sales of tangible personal property, product delivered electronically, and services toward those thresholds, California appears to include only sales of tangible personal property in calculating gross revenue or number of transactions. On December 19, two California state lawmakers introduced remote seller legislation designed to establish a higher sales threshold of $500,000, to protect small businesses. On December 18, a Virginia state lawmaker prefiled remote seller legislation that would incorporate thresholds numerically identical to South Dakota’s, while only counting “retail sales” toward the thresholds, which would also apply to online marketplace facilitators.[3] Previously, Virginia Deputy Finance Secretary Joe Flores confirmed interest within the administration and the General Assembly in enacting an economic nexus law “very similar” to the one at issue in Wayfair.[4]

An increasing number of states also assert platform nexus against online marketplaces or require them to comply with notice and reporting requirements. For businesses making sales online, 2018 has brought an onslaught of new and often uncertain sales tax collection responsibilities.

The following year-end survey of the post- Wayfair landscape considers the rapid rise of these sales tax nexus policies and related issues, including:

  • disparate sales thresholds across the states;
  • the burden of local sales tax compliance;
  • the breadth of platform nexus/marketplace facilitator laws;
  • the possibility of Congressional intervention; and
  • the impact of the Supreme Court’s ruling on other taxes.

As States Proceed, Uncertainty Abounds

Even as most states have announced remote seller nexus policies, debate continues over what characteristics are required to meet the standards established in Wayfair. In a recent article for the Journal of Multistate Taxation and Incentives, Tax Foundation’s Joseph Bishop-Henchman, Hannah Walker, and Denise Grabe laid out some post-Wayfair options for states and suggested a seven-point “checklist of factors present in South Dakota law that strongly suggested why it would be constitutional” under the Wayfair standard.[5] By the authors’ reckoning, these seven factors are: (1) a safe harbor; (2) no retroactive collection; (3) single state-level administration of all sales taxes in the state; (4) uniform definitions of products and services; (5) a simplified tax rate structure; (6) access to sales tax administration software provided by the state; and (7) immunity from errors for sellers using the software.

Under these metrics, the authors give the economic nexus “green light” only to the 11 states they consider to satisfy all seven factors “through SSUTA membership and enabling legislation with de minimis thresholds and retroactive bans”: Georgia, Indiana, Iowa, Kentucky, Minnesota, New Jersey, North Dakota, South Dakota, Utah, Vermont, and Wyoming.

Many states have effectively rejected this sort of strict reading of Wayfair, however. For example, Louisiana’s Remote Seller Commission, the entity charged with crafting, implementing, and administering, the state’s remote seller policy, has acknowledged that Louisiana is not a member of Streamlined Sales and Use Tax Agreement (SSUTA), but contended that Wayfair does not mandate SSUTA participation and that the Commission will implement procedures that meet Commerce Clause standards and do not unduly burden remote sellers.

Joe W. Garrett, Jr., the Deputy Commissioner of the Alabama Department of Revenue, served as a panelist at the 2018 Paul J. Hartman State and Local Tax Forum in Nashville,  Tennessee where said that he had overall been very pleased by how states have reacted to the Wayfair decision.[6] He characterized state economic nexus standards as reasonable and restrained, noting that he hadn’t seen states pursuing retroactive application of economic nexus provisions.

Marilyn Wethekam, a partner at Horwood Marcus & Berk Chartered in Chicago, raised the concern that, separate from the content of a state’s economic nexus policy, “there may be procedural issues resulting from the manner in which the states roll out the guidance.” She questioned whether “a bulletin or notice that sets forth the registration and collection requirements” would meet state procedural standards. Even if guidance conforms to a state’s administrative requirements, “changes to the law might be necessary before the notice can be issued. It seems like a prudent idea to check both the statutory language and the procedural requirements before advising a remote seller to register and start collecting.”

A few states, including Arizona, Arkansas, Florida, Idaho, Kansas, and New York, have concluded that legislative changes are necessary before remote seller collection policies can proceed. Suffice it to say that the intricacies of the Wayfair decision will keep states, businesses, practitioners, taxing agencies, and the courts busy for years to come, assuming Congress does not intervene.

Divergent Thresholds

Quite a few states have adopted economic nexus thresholds based on South Dakota’s, which look to gross revenue from sales into South Dakota of tangible personal property, products delivered electronically, and services that exceed $100,000, or that are made for delivery into South Dakota in 200 or more transactions. While the threshold figures are often the same or similar, the types of transactions included in threshold calculations can vary significantly from state to state.

For example, Maryland’s thresholds include sales of tangible personal property or taxable services for delivery into Maryland exceeding $100,000 in gross revenue, or made for delivery into the state in 200 or more separate transactions. Hawaii’s thresholds are tied to gross proceeds from sales of tangible personal property, services, or intangible property totaling $100,000 or more, or made in 200 or more separate transactions. Asked to clarify publicly-issued guidance on which sales count toward California’s thresholds (also sales exceeding $100,000 or occurring in 200 or more separate transactions), the California Department of Tax and Fee Administration informally indicated that the thresholds include both taxable and nontaxable sales, but only sales of tangible personal property are among the nontaxable sales included.[7]

While many states do not specify whether exempt or nontaxable sales are included in computing the threshold, others, like Washington, explicitly count both taxable and nontaxable sales. One state, Rhode Island, counts only taxable sales toward its threshold for the state’s notice and reporting scheme with elective economic nexus alternative.

For businesses engaged only in multistate sales of pure e-commerce products or services, such as software accessed remotely or downloadable apps, the rise of economic nexus requires a detailed analysis of each state’s nexus provisions and taxing statutes. Noted state tax scholar and University of Georgia School of Law professor Walter Hellerstein, in forthcoming revisions to his State Taxation treatise, considers the same issue in the context of marketplace platform nexus laws. “Marketplace platforms facilitate sales not only of tangible personal property but also of an increasing volume of services and ‘digital products’,” he writes. “From a practical perspective, requiring platforms to collect tax on sales of taxable services and digital products may create burdens for platforms in determining what services and digital products are subject to tax in each state as well as determining the state in which such services or digital products are sold.”[8]

States with thresholds that include both taxable and nontaxable transactions may not have considered the likelihood of repeat “zero returns” from businesses that only make nontaxable sales but meet the dollar or volume requirements.

Thresholds in Larger States

Since Wayfair, several large states have deliberated the appropriate threshold for asserting nexus against remote sellers making sales into their high-dollar, high-volume marketplace. Many practitioners contend that the Wayfair decision suggests it would be inappropriate for a large state like California, Florida, New York, or Texas to implement thresholds similar to South Dakota’s.

The Texas Comptroller announced that its economic nexus policy, which has been incorporated into an existing regulation takes effect on January 1, 2019, with enforcement beginning on October 1, 2019.[9] Under the regulation, which was crafted with input from taxpayers and industry groups over the past few months, remote sellers with less than $500,000 in total Texas revenue in the preceding 12 calendar months will not be required to comply (although the regulation contains an anti-abuse provision that allows the Comptroller to “consolidate the total Texas revenue of sellers engaged in conduct that circumvents the safe harbor amount”). Texas Comptroller of Public Accounts spokesperson Kevin Lyons noted that Texas Senator Jane Nelson recently filed SB 70, which would simplify compliance by creating a 1.75% maximum combined local rate for remote sellers, along with a refund mechanism for the roughly 250 jurisdictions with lower local rates.

Following months of rumors about California’s economic nexus plans, the California Department of Taxation and Fee Administration (CDTFA) announced its remote seller guidelines on December 11, 2018. The CDTFA’s notices establish that, effective April 1, 2019, a retailer located outside of California must collect use tax on its taxable sales if, during the preceding or current calendar year: the retailer’s sales into California exceed $100,000, or the retailer made sales into California in 200 or more separate transactions. The Frequently Asked Questions accompanying the notice refer to “retail sales into California [for which] the total sales price charged was greater than $100,000” and “sales for delivery in California in 200 or more separate transactions.” We sought clarification whether the thresholds include both taxable and nontaxable sales and whether, like South Dakota’s, they extend beyond sales of tangible personal property to sales of services and electronically-delivered products. By email, the CDTFA informally explained that the thresholds “are based on total sales for delivery into California, not just taxable sales,” and later clarified that “only sales of tangible personal property count towards the thresholds.”

Marilyn Wethekam, a partner at Horwood Marcus & Berk Chartered, posited that the CDTFA’s language could lead a taxpayer to assume “that wholesale or other exempt sales would not count toward the $100,000 [sales threshold] but [would] apply to the transaction threshold” and questioned whether under that assumption “199 wholesale transactions and two retail transactions put a seller over the threshold.” Wethekam believes that “the FAQs themselves need at the very least clarification” and added that it is unclear “whether the FAQs meet the administrative procedure requirements for implementing policy.”

On December 19, two state lawmakers, Senator Mike McGuire, Chair of the Senate Committee on Governance and Finance and Assemblywoman Autumn Burke, Chair of the Assembly Committee on Revenue and Taxation, introduced legislation to be taken up in committee as early as January 14 that would establish a $500,000 threshold explicitly tied to sales of tangible personal property into California. The bill would also lower the state’s $1 million click-through nexus threshold to $500,000. In an earlier press release, they explained that the intent is to implement Wayfair “without being too burdensome on the thousands of small businesses that are the foundation of the Golden State’s economy.” They contended that legislative modifications are necessary “to ensure that California not only implements Wayfair effectively, but also fairly.”

Shail P. Shah, a partner with Reed Smith in Los Angeles, argued that the CDTFA’s ” notice, absent regulations, seems legally dubious,” particularly “given that there are only a few weeks left in the year,” and characterized the notice as ” hastily issued.

At one time, the CDFTA had been reported to mull a sales threshold more along the lines of the one adopted by the Texas Comptroller and proposed by state legislatures. Andrew W. Yates, a senior associate with Alston & Bird LLP, explained the Department’s reasoning as he understood it to be laid out during the agency’s October Wayfair webcast. Because “California law imposes substantial nexus for sales tax purposes to the extent of the U.S. Constitution,” he told Checkpoint, the CDTFA seemed to read Wayfair ” to say that the extent of substantial nexus under the Constitution is $100,000 of sales or 200 transactions.” He understood the CDTFA to suggest that it may have “no choice under California law but to set the threshold at $100,000 in sales or 200 transactions; to set the thresholds any higher would put improperly limit the jurisdiction that the California Legislature prescribed.” Yates characterizes this as “a stiff, and potentially erroneous, interpretation of Wayfair,” and noted that “the Court deliberately left open the possibility that the substantial nexus could be different under different facts.” Wethekam anticipates  future litigation, in California and elsewhere, over the issue whether “the substantial nexus standard [should] vary by size of the state.”

State taxing agencies in Florida and New York have consistently declined since Wayfair to discuss the potential shape of their economic nexus policies. At the New York University School of Professional Studies’ 37th Institute on State and Local Taxation, held on December 17-18 in New York City, New York Department of Taxation and Finance Deputy Commissioner Scott Palladino spoke on a panel with other tax administrators, and explained that the Department “is still looking at what changes we would need to make in order to avoid a constitutional problem.” He mentioned that local taxes are an issue, especially the clothing and footwear exemption, which is a local option. He implied that statutory changes are likely in the 2019 legislative session.

Tallahassee-based attorney Mark Holcomb, a Dean Mead shareholder, says that the Florida Department of Revenue “continues to wait for guidance from the Legislature regarding implementation of Wayfair, in terms of establishing any economic nexus thresholds and simplifying the mail order sales statute.”

Holcomb also downplayed the possibility that the state might attempt to apply Wayfair retroactively, a concern some practitioners have raised because of a brief filed by the office of the state’s Attorney General over the summer. “I don’t read the brief that was filed in Golden Hookah to signal an effort to retroactively apply Wayfair, as that brief was filed on behalf of a different agency enforcing a different tax scheme,” he says.

Decentralized Local Tax Administration

States with decentralized administration and collection of local taxes, such as Alabama, Colorado, and Louisiana, may face a tougher challenge than others in complying with Wayfair‘s emphasis on simplified compliance for remote sellers.

Sarah McGahan, a state and local tax director for KPMG LLP in Washington, D.C., confirms that many clients are concerned about “complexities stemming from jurisdictions where local sales and use tax is administered by the locality, rather than the state taxing authority. Despite some efforts to simplify things for remote sellers in these jurisdictions, there is still some uncertainty as to when a remote seller has to collect local tax, what the correct local rate of tax should be, and whether there are any protections for sellers, if, for example, the seller over-collects in a particular locality as a result of charging a single state and local rate.”

The Alabama Department of Revenue has attempted to alleviate this administrative burden by enabling remote sellers participating in the simplified sales and use tax program to collect and report an 8% flat tax on “all sales regardless of the locality shipped to in Alabama.”[10] Many practitioners see this approach as an elegant compromise, although the argument has been made that “a flat sales tax higher than the lowest sales tax charged anywhere in the state is probably unconstitutional.” [11]

Colorado may ultimately attempt to alleviate the compliance burden on remote sellers legislatively. The Colorado Department of Revenue’s remote seller policy was originally slated to take effect on January 1, but has been delayed twice, through May 31, 2019.[12]  Executive Director Mike Hartman indicated that the Department had “heard from legislators and the business community” and “will evaluate the need for another extension as May 31 nears. This additional time will give the state legislature an opportunity to find innovative solutions to streamline and simplify our sales tax collection laws.”

Louisiana has delayed mandatory collection and remittance requirements for remote sellers until an undetermined date in 2019. According to a Remote Seller Information Bulletin adopted at the Louisiana Remote Sellers Commission’s December 18 meeting, remote sellers with “gross revenue for sales delivered into Louisiana in excess of $100,000 from sales or separate transactions of 200 or more sold for delivery into Louisiana” are considered “dealers” under state law and should voluntarily file the state’s Direct Marketer return.[13] The bulletin defines a remote seller as any seller that “sells for sale at retail, use, consumption, distribution, or for storage to be used for consumption or distribution any taxable tangible personal property, products transferred electronically, or services for delivery within Louisiana.” Remote sellers with cumulative annual gross receipts in excess of $50,000 remain subject to Louisiana’s notice and reporting requirements.

Louisiana had previously seemed poised to adopt a Remote Sellers Tax Return that would replace the more complex state and local return regime historically followed by in-state sellers. However, voting on the return was tabled at the Commission’s November 27 meeting.

In what attorney Andre Burvant, a partner with Jones Walker LLP, called “an about-face,” some Commission members “decided they did not want to rush into a return that had not been properly vetted or tested.” Burvant added that Louisiana’s Uniform Local Sales Tax Board, a different entity, is compiling information about rates and exemptions at the local level and the Commission was “interested in seeing what the local board comes up with.” Matt Mantle, also a partner with Jones Walker LLP, added that the debate over the remote seller return and which remote sellers would be allowed to use it, coupled with ongoing tension between the state and localities, could make the burden on remote sellers “go from bad to worse,” likely fueling future litigation.

Louisiana may also become one of the states with a marketplace facilitator policy. The latest Remote Seller Information Bulletin notes that the Commission will be submitting information on potential marketplace facilitator provisions to the Louisiana legislature for consideration during the 2019 Regular Session.[14] The bulletin also cautions that there is currently a Louisiana district court decision that a marketplace operator falls within the state’s definition of a “dealer.”[15] Dealers are typically subject to Louisiana’s state and local collection and remittance requirements. The decision is currently on appeal.

Alaska’s municipal taxing agencies may also be interested in jumping on the Wayfair bandwagon. The state does not impose a statewide sales or use tax, but in July, Alaska Department of Revenue Tax Division Deputy Director Brandon Spanos issued a statement that while “the Wayfair decision has little impact on state taxes,” the decision will likely affect collection in the “105 local governments in Alaska with their own sales tax.”[16] Recent press reports suggest that these localities are now considering whether and how they can collect revenue on internet sales. Troy Tankersley, Finance Director for the City of Wasilla, indicated that the city is monitoring the issue.[17]

Marketplace Facilitators

While only a handful of states have enacted marketplace facilitator nexus or notice and reporting policies, many practitioners expect these types of provisions to be an emerging trend in the post- Wayfair landscape. Maria Eberle and Lindsay LaCava, partners with Baker McKenzie in New York, ” anticipate that states will continue to look at marketplace provider or platform laws as a means of enforcing economic nexus with respect to small online sellers, essentially shifting the administrative burdens of collecting and remitting the tax to the marketplace providers.”

Platform nexus legislation is highly complex and can encompass various sellers and other actors. As Hellerstein observes in the forthcoming revisions to  State Taxation, “state platform legislation is directed at three categories of actors: (1) platforms, the entities that operate the marketplaces; (2) referrers, those who bring buyers and sellers together to consummate a sale over a platform but do not collect receipts from the buyer; and (3) remote sellers, including those who sell over platforms, sometimes called marketplace sellers. These categories of actors are not airtight. While platforms typically are online marketplaces that list third parties’ products for sale on their websites, in many circumstances platforms not only facilitate sales of third parties’ products but also sell products of their own. Referrers may operate as marketplace platforms or as sellers in their own right with respect to some of the transactions in which they engage, potentially triggering different reporting or collection obligations for specified classes of transactions. Remote sellers…. may or may not sell over platforms, and that distinction can be critical in determining their exposure to tax collection or reporting obligations.”

Recognizing a need for uniformity, the Multistate Tax Commission (MTC) established a “Marketplace Facilitator Work Group,”[18] which has  issued a white paper addressing the issues arising from the  Wayfair decision specific to the sales tax collection responsibilities of the “marketplace facilitator.” The paper characterized a uniform approach as “the highest priority.”  The work group focused on six key issues states should consider if they require marketplace facilitators to collect and remit sales tax: (1) definitions; (2) registration and filing requirements; (3) audit; (4) thresholds for economic nexus; (5) exemption certificates; and (6) liability protection.

The work group recommended uniform definitions for “marketplace ” and “marketplace seller, “and provided examples of a broad and a narrow definition for “marketplace facilitator.” States responding to the work group’s survey were split on whether the definition of a marketplace facilitator should be narrow or broad.

Checkpoint Editor David Engel studied the white paper and inquired about the potential breadth of the marketplace facilitator definition and whether it could be construed to include classified ad markets (and other advertising markets such as television), in addition to payment processing services.   The MTC’s Richard L. Cram replied  that “[e]veryone seems to consider the Washington definition of ‘marketplace facilitator’ as being the ‘broad’ definition, and [the] Washington Department of Revenue does publish the following in explaining their definition: ‘Websites that merely advertise goods for sale and do not handle transactions do not meet the definition of a marketplace facilitator.'” With that, he added: “I doubt that states would view newspapers with classified ads or televisions that do advertising as fitting within even the broad definition of marketplace facilitators. As far as [payment processors], it would most likely be a platform using [the processor] to handle an internet retail sales transaction that would be considered the marketplace facilitator. I think payment processors think of themselves as essentially only handling the credit card approval process, which seems to be a narrow enough function to remain outside the broad definition, such as Washington’s.” Cram also cautioned, however, that each state is the ultimate arbiter of what its own platform nexus policy encompasses.

The details of New Jersey’s broad new marketplace facilitator law are beyond the scope of this article but deserve a lengthy consideration all their own. Engel sought informal advice from the New Jersey Division of Taxation regarding advertising activities, and the Division informally indicated that  to be considered a marketplace facilitator, the seller must be “involved in the transaction between the advertiser and the newspaper reader.” A seller may be considered a marketplace facilitator in New Jersey “when the listing fee or advertising fee is connected to the actual sale of tangible personal property and services.”

Another consideration for states implementing marketplace facilitator tax collection responsibilities is the potential for the facilitator to erroneously collect and remit the tax when a marketplace seller directly handles returned items. In that instance, Cram acknowledged that “a contractual arrangement between the marketplace seller and the marketplace facilitator would need to address [the issue]. If the state has enacted a law requiring the marketplace facilitator to collect the tax, then the state is going to look to the marketplace facilitator to correctly collect it. If the marketplace facilitator erroneously collected and remitted tax, most likely, it would be the marketplace facilitator that needs to file the refund claim with the state to seek return of the over-collected tax.”

The variety of issues presented by platform nexus laws and their overlap with remote seller nexus provisions, notice and reporting requirements with alternative collection elections, and click-through and affiliate nexus provisions is only beginning to crystalize.

In their December article for the Journal of Multistate Taxation and Incentives, Tax Foundation’s Joseph Bishop-Henchman, Hannah Walker, and Denise Grabe contend that  states should “consider repealing click-through nexus and notice-and-reporting laws,” because “[i]f a seller is pressured to collect through those laws but would not meet the de minimis threshold, the enforcement of those laws could be a Due Process Clause or Commerce Clause violation.”

The Possibility of Congressional Intervention 

In our last installment of One By One, States Respond to South Dakota v. Wayfair,[19] we argued that the possibility of federal action limiting states’ ability to impose sales tax collection duties on remote sellers remains as uncertain as it has since the U.S. Supreme Court decided Quill v. North Dakota in 1992.

KPMG LLP state and local tax director Sarah McGahan, of the firm’s Washington National Tax Practice, observes that, since Wayfair, “there have been a handful of bills introduced in Congress that would seek to limit, in varying degrees, the states’ authority to require remote sellers to collect and remit. At least two of these bills have been introduced by Rep. Jim Sensenbrenner — the latest introduced bill simply prohibits states from imposing sales and use taxes on any sale that occurred prior to the Wayfair decision. While there is some interest in this issue on Capitol Hill, it’s far from certain that Congress will act in the near or medium term to address the Wayfair decision, particularly in light of the guaranteed opposition from states and certain retailers.” She warns that “retailers subject to state economic nexus provision should not count on federal legislation to preclude them from having to register and start collecting.”

Considerations for Other Taxes

Concern and speculation about the implications of Wayfair outside the sales and use tax arena continue to reverberate across the state tax world.

The MTC has formed a work group to revise its P.L. 86-272 Statement (last updated in 2001). MTC counsel Brian Hamer confirmed that he “expect[s] the first [public] teleconference meeting will be in the middle of January.” As part of the process of determining how the Statement should be revised, the work group will also “look at activities that have arisen over the past two decades such as the use of the Internet and the sale of digital goods.”

Many states already assert factor-presence nexus in the corporate income tax environment, and the trend is likely to continue. Maria Eberle and Lindsay LaCava, partners with Baker McKenzie in New York, advise businesses to “consider the potential impact of the Wayfair decision on business activity taxes, such as net income taxes and gross receipts taxes.” While a “direct tax (such as a net income tax) is distinguishable from an indirect or pass-through tax (such as a sales and use tax) in terms of the economic burden imposed on a business, perhaps warranting a more stringent nexus standard,” they note, “it may be difficult to argue that physical presence is the appropriate standard in light of the Supreme Court’s complete abandonment of the physical presence standard in Wayfair. If states continue to adopt economic nexus standards for business activity tax purposes in the wake of Wayfair, states will have to be consistent in applying that standard not just for jurisdictional nexus purposes but also for related computational purposes, such as determining whether a taxpayer is subject to tax in another jurisdiction for throwback rule purposes or for purposes of computing the apportionment factor of a combined group under [the Joyce rule].”

In an example of a state that is aggressively pursuing the possibility of economic nexus for other types of taxes, Texas Comptroller of Public Accounts spokesperson Kevin Lyons noted that “in light of the SCOTUS decision on Wayfair, we are trying to determine how the Franchise tax applies to remote sellers.” Lyons said that while the Comptroller’s office is not yet close to a decision or rulemaking process, they are actively reviewing other taxes, including the state’s hotel occupancy tax, for economic nexus impacts. He added that the Comptroller’s office is specifically focusing on third-party booking websites for purposes of the hotel occupancy tax.

Continue Your Research on Checkpoint

A version of this article originally appeared  in Checkpoint State and Local Tax Update on December 12, 2018, with an accompanying chart indicating whether each state asserts economic nexus, including thresholds and retroactivity; is a full SSUTA member; imposes notice and reporting requirements on remote sellers; and has announced a marketplace facilitator policy.

For additional coverage of the Wayfair case and economic nexus laws impacting remote sellers, see Checkpoint Catalyst’s Sales and Use Tax Nexus and E-Commerce topics, Checkpoint State & Local Tax Reporters and Create-a-Charts, and the revised State Taxation treatise. Additional guidance is available in our South Dakota v. Wayfair Resource Center.


Written by: Sarah Horn (M.Acc., J.D.; Editor, Checkpoint Catalyst), Jill McNally (J.D., LL.M.; Editor, Checkpoint), and Rebecca Newton-Clarke (J.D.; Senior Editor, Checkpoint Catalyst)

Note: Marilyn Wethekam, Lindsay LaCava, and Maria Eberle are contributors to Checkpoint Catalyst.

[1] South Dakota v. Wayfair, Inc., et al., 17-494 (6/21/2018).

[2] 34 Tex. Admin. Code § 3.286, effective 01/01/2019.

[3] HB 1722, prefiled and ordered printed; offered 01/09/2019.

[4] Phone Conversation, 12/11/2018.

[5] Joseph Bishop-Henchman, Hannah Walker, and Denise Grabe, “Post-Wayfair Options for States,” Journal of Multistate Taxation and Incentives, Nov/Dec 2018.

[6] Sarah Horn, Wayfair a Hot Topic at 25th Annual Paul J. Hartman State and Local Tax Forum, Checkpoint State & Local Tax Updates, 10/24/2018.

[7] Press Release: California Announces New Use Tax Collection Requirements for In-State and Out-of-State Retailers, CDTFA, 12/11/2018; Special Notice: New Use Tax Collection Requirements for Out-of-State Retailers Based on Sales into California Effective April 1, 2019, CDTFA, 12/11/2018; Special Notice: New District Use Tax Collection Requirements for All Retailers Effective April 1, 2019, CDTFA, 12/11/2018; Frequently Asked Questions (FAQ’s) about Use Tax Collection Requirements Due to Wayfair Decision, CDTFA, 12/11/2018; Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision, CDTFA website, 12/11/2018; Email on file with authors, 12/12/2018 and 12/19/2019.

[8] Walter Hellerstein, forthcoming revisions to State Taxation, 19.08[7][b], pages 19-209 to 19-210.

[9] 34 Tex. Admin. Code § 3.286, effective 01/01/2019; Phone conversation, 12/10/2018; Email on file with authors.

[10] Simplified Sellers Use Tax Remote Seller FAQs, Alabama Department of Revenue website.

[11] Joseph Bishop-Henchman, Hannah Walker, and Denise Grabe, “Post-Wayfair Options for States,” Journal of Multistate Taxation and Incentives, Nov/Dec 2018.

[12] Colorado Department of Revenue extends grace period for new sales tax rules to May 31, 2019, Colorado Department of Revenue, 12/06/2018.

[13] Remote Seller Information Bulletin No. 18-002, 12/18/2018.

[14] Remote Seller Information Bulletin No. 18-002, 12/18/2018.

[15] Normand v. USA LLC, 24th Judicial District Court, Jefferson Parish, No. 769-149, 03/02/2018.

[16] Email on file with authors, 07/31/2018.

[17] Email on file with authors, 12/05/2018.

[18] The group comprised members of some state tax agencies and “industry participants.”

[19] Sarah Horn, Jill McNally, and Rebecca Newton-Clarke, One by One, States Respond to South Dakota v. Wayfair (08/29/2018).

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