2020 sales tax changes: Midyear update

2: South Dakota v. Wayfair and economic nexus laws

1. COVID-19 and tax
2. South Dakota v. Wayfair
3. Tax laws and revenue recovery
4. Tax on digital goods and services
5. Marketplace laws
6. Product taxability laws

Two years ago, on June 21, 2018, the Supreme Court of the United States ruled in favor of the state in South Dakota v. Wayfair, Inc. It was a pivotal decision for sales tax, states, and businesses.

Here’s a recap: The Wayfair decision overruled a long-standing physical presence rule that, according to the majority, treated “economically identical actors differently for arbitrary reasons.” For example, a business with just a few items of inventory in a small warehouse in a state was obligated to collect and remit that state’s sales tax on all its sales, while an internet seller with a “pervasive” presence couldn’t be required to collect tax on similar sales.