South Dakota v. Wayfair, Inc.

New sales tax rules for remote (online and off-line) sellers

What remote sellers need to know

On June 21, 2018, the Supreme Court of the United States ruled in favor of the state in South Dakota v. Wayfair, Inc. The decision allows states to tax remote sales. What does it mean for out-of-state sellers? 

It used to be that states could only tax sales by businesses with a physical presence in the state. Now economic activity in a state — economic nexus — can trigger a sales tax collection obligation. Economic nexus is based entirely on sales revenue, transaction volume, or a combination of both. 

South Dakota blazed the trail, and other states are following close behind. Here’s a look at how the court’s decision is changing the world of sales tax compliance. 





Remote seller nexus by state

as of  June 10, 2019

Economic nexus is sweeping the nation in the wake of South Dakota v. Wayfair, Inc., but it’s important to remember that states also have other ways of taxing remote sales: affiliate nexus (ties to in-state affiliates), click-through nexus (links on in-state websites), cookie nexus (placing software or apps on in-state devices), tax on marketplace sales (facilitator held liable), and non-collecting seller use tax reporting (non-collecting sellers must share consumer use tax information). See the chart below for more details.

Click here for a state-by-state guide to sales tax economic nexus rules.

More questions? Read our full FAQ here.


Remote seller nexus thresholds
as of June 14, 2019

Sales tax states Economic nexus effective date Economic nexus thresholds triggering a collection obligation ($ and/or transaction volume)
Transaction included in economic nexus threshold test Other forms of remote seller nexus, with effective date

Alabama

10.1.2018

More than $250,000
and
additional activities

 

Retail sales of products* delivered into the state

Non-collecting seller use tax reporting: 1.1.2019

Tax on marketplace sales: 1.1.2019

Arizona

10.1.2019

More than $200,000 for calendar year 2019; more than $150,000 for calendar year 2020; and more than $100,000 for calendar year 2021 and subsequent calendar years

Gross proceeds of sales of products* or gross income derived from business in the state (excluding marketplace sales) 

Tax on marketplace sales: 9.20.2016; updated effective 10.1.2019

Arkansas

7.1.2019

More than $100,000 
or
200 separate transactions

Sales of products*, taxable services, digital codes, or specified digital products subject to Arkansas sales or use tax delivered into the state

Affiliate/Click-through nexus: 2011; eliminated effective 7.1.2019

Tax on marketplace sales: 7.1.2019

California

4.1.2019

More than $500,000

Sales of property* for delivery into the state

Affiliate/Click-through nexus: 2011; repealed effectie 4.1.2019

Tax on marketplace sales: 10.1.2019

Colorado

6.1.2019

$100,000 or more

 

Gross sales or services delivered into the state, including exempt sales

Affiliate/Click-through nexus: 2014

Non-collecting seller use tax reporting: 7.1.2017

Tax on marketplace sales: 10.1.2019

Connecticut

12.1.2018

At least $250,000
and
200 or more retail sales
and
systematic solicitation of sales in the state via the internet or other means    
 

Retail sales of products* delivered into the state

Non-collecting seller use tax reporting for referrers: 12.1.2018, with additional requirements effective 7.1.2019

Tax on marketplace sales: 12.1.2018

Florida**

 

 

 

 

Georgia

1.1.2019

More than $250,000 ($100,000 as of 1.1.2020)
or
200 or more retail sales
 

Retail sales of products* delivered into the state electronically or physically

Affiliate/Click-through nexus: 2012

Non-collecting seller use tax reporting: 1.1.2019 (eliminated as of 1.1.2020)

Hawaii

7.1.2018

At least $100,000
or 
200 or more separate transactions

Retail sales of products*, intangible property, or services used/consumed or delivered in the state

Non-collecting seller use tax reporting: 1.1.2020

Tax on marketplace sales: 1.1.2020

Idaho

6.1.2019

More than $100,000

Sales delivered into Idaho

Click-through nexus: 7.1.2018

Tax on marketplace sales: 6.1.2019

Illinois

10.1.2018

At least $100,000
or
200 or more separate sales
 

Sales of products* in the state, including exempt sales but not sales for resale or occasional sales

Affiliate nexus: 2011

Click-through nexus: 2015

Tax on marketplace sales: 1.1.2020

Indiana

10.1.2018

More than $100,000
or
200 or more separate transactions  
 

Sales of products*, electronically transferred products, or services delivered in the state

Tax on marketplace sales: 7.1.2019

Iowa

1.1.2019

At least $100,000
or
200 or more separate transactions; transaction threshold removed as of 7.1.2019

Sales of products*, services, or specified digital products into the state

Affiliate nexus: 2013

Cookie nexus: 1.1.2019

Tax on marketplace sales: 1.1.2019

Kansas

 

 

 

Affiliate/Click-through nexus: 2013

Kentucky

10.1.2018

More than $100,000
or
200 or more separate transactions

Sales of products* or digital property delivered or transferred electronically into the state

Non-collecting seller use tax reporting: 7.1.2013 (repealed effective 7.1.2019)

Tax on marketplace sales: 7.1.2019

Louisiana

The original effective date of 1.1.2019 has been changed to "a date to be determined in 2019"

More than $100,000
or
200 or more separate transactions

Sales of products*, products transferred electronically, or taxable services delivered into the state

Affiliate/Click-through nexus: 2016

Non-collecting seller use tax reporting: 7.1.2017

Maine

7.1.2018

More than $100,000
or
200 or more separate transactions

Gross sales of all products*, electronically transferred products, or services delivered into the state, whether taxable or not

Affiliate/Click-through nexus: 2013

Maryland

10.1.2018; for certain tobacco taxes: 10.1.2019

More than $100,000
or
200 or more separate transactions

Sales of products* or taxable services delivered into the state

Tax on marketplace sales: 10.1.2019

Massachusetts

 

 

 

Cookie nexus: 10.1.2017

Michigan

10.1.2018

At least $100,000
or
200 or more separate sales

Sales of products* or services in the state

Affiliate/Click-through nexus: 2015

Minnesota

10.1.2018

10 or more retail sales totaling more than $100,000
or
100 or more retail sales

Threshold changes to more than $100,000 in sales or 200 transactions effective 10.1.2019

Retail sales from outside Minnesota into the state

Affiliate nexus: 2013

Click-through nexus: 7.1.2019

Tax on marketplace sales: 10.1.2018; amended effective 10.1.2019

Mississippi

9.1.2018

More than $250,000
and
systematic exploitation of the market in the state

Sales of products* and services into the state (retail, wholesale, and exempt)

 

Missouri

 

 

 

Affiliate/Click-through nexus: 2013

Nebraska

1.1.2019 (may affect additional sellers as of 4.1.2019)

More than $100,000
or
200 or more separate transactions

Gross sales into the state

Tax on marketplace sales: enacted 4.1.2019

Nevada

10.1.2018 

More than $100,000
or
200 or more separate transactions

Taxable and exempt sales of products* into the state

Affiliate/Click-through nexus: 2015

Tax on marketplace sales: 10.1.2019

New Jersey

11.1.2018

More than $100,000
or
200 or more separate transactions

Sales of products,* specified digital products, or services delivered in the state

Click-through nexus: 2014

Tax on marketplace sales: 11.1.2018

New Mexico

7.1.2019

At least $100,000

Taxable gross receipts from sales, leases, and licenses of products*, and sales of licenses and services of licenses for use of real property sourced to the state

Tax on marketplace sales: 7.1.2019

New York

Effective "immediately" after the Wayfair ruling, 6.21.2018; however, no clearly stated effective date is currently provided

More than $300,000
and
more than 100 separate transactions

Gross sales of products* delivered into the state

Affiliate/Click-through nexus: 2008

Tax on marketplace sales: 6.1.2019

North Carolina

11.1.2018

More than $100,000
or
200 or more separate transactions

Sales of products* or digital property sourced to North Carolina 

Click-through nexus: 2009

 

North Dakota

1.1.2019

More than $100,000

Taxable sales and taxable services in the state

Tax on marketplace sales: 10.1.2019

Ohio

 

 

 

Affiliate/click-through nexus: 2015

Cookie nexus: 1.1.2018

Oklahoma

11.1.2019

At least $100,000

Aggregate sales of products* delivered into the state

Affiliate nexus: 2016

Non-collecting seller use tax reporting: 7.1.2018

Tax on marketplace sales: 7.1.2018

Pennsylvania

7.1.2019

More than $100,000 

Gross sales in the Commonwealth

Affiliate/Click-through nexus: 2011

Non-collecting seller use tax reporting: 3.1.2018 (additional requirements 4.1.2019)

Tax on marketplace sales: 3.1.2018 (additional requirements 4.1.2019)

Rhode Island

7.1.2019

More than $100,000
or
200 or more separate transactions

Sales of products*, prewritten computer software and vendor-hosted prewritten software delivered electronically or by load and leave, and/or taxable services 

Affiliate/Click-through nexus: 8.17.2017

Cookie nexus: 8.17.2017

Non-collecting seller use tax reporting: 1.15.2018

Tax on marketplace sales: 8.17.2017 / new requirements 7.1.2019

South Carolina

11.1.2018

More than $100,000

Sales of all products*, electronically transferred products, or services delivered into the state, whether taxable or exempt

Tax on marketplace sales: 11.1.2018 (This is being challenged; the outcome of the lawsuit could impact enforcement); a new law reinforces the earlier rule as of 4.26.2019

South Dakota

11.1.2018

More than $100,000
or
200 or more separate transactions

Taxable and exempt sales of products*, electronically transferred products, or services delivered into the state

Non-collecting seller use tax reporting: 2011

Tax on marketplace sales: 3.1.2019

Tennessee

10.1.2019

More than $500,000
and systematic solicitation of sales in the state

Taxable products* and taxable services into the state

Affiliate nexus: 2014

Click-through nexus: 2015

Texas

10.1.2019

$500,000 

Sales of taxable and exempt products* and services into the state

Affiliate nexus: 2012

Tax on marketplace sales: 10.1.2019

Utah

1.1.2019

More than $100,000
or
200 or more separate transactions

Sales of products*, electronically transferred products, or services delivered into the state

Affiliate nexus: 2012

Tax on marketplace sales: 10.1.2019

Vermont

7.1.2018

At least $100,000
or
200 or more individual sales transactions
and
systematic solicitation of sales in the state

Sales into the state

Click-through nexus: 2015

Non-collecting seller use tax reporting: 7.1.2017

Tax on marketplace sales: 6.1.2019

Virginia

7.1.2019

More than $100,000
or
200 or more separate transactions

Retail sales into the state

Affiliate nexus: 2013

Tax on marketplace sales: 6.1.2017; new law takes effect 7.1.2019

 

Washington

10.1.2018 (for remote transactions); requirements change 3.15.2019

7.1.2017 (for B&O tax only)

More than $100,000
as of 3.15.2019

More than $267,000 of yearly gross receipts sourced or attributed to WA in 2017, $285,000 in 2018
or
at least 25% of total yearly gross receipts sourced or attributed to WA

Effective 1.1.2020, the economic nexus threshold for B&O tax will change to $100,000

 

Retail sales into the state; effective 1.1.2020, that changes to cumulative gross income in the state

 

Click-through nexus: 2015; eliminated effective 3.15.2019

Non-collecting seller use tax reporting: 1.1.2018; eliminated effective 7.1.19

Tax on marketplace sales: 1.1.2018; new requirements effective 10.1.2018 and 7.1.2019

 

West Virginia

1.1.2019

More than $100,000
or
200 or more separate transactions

Sales of taxable and nontaxable products* and services

Affiliate nexus: 2014

Tax on marketplace sales: 7.1.2019

Wisconsin

10.1.2018

More than $100,000
or
200 or more separate transactions

Sales of taxable and nontaxable products* and services

 

Wyoming

2.1.2019

More than $100,000
or
200 or more separate transactions

Taxable, exempt, and wholesale sales of products*, admissions, or services delivered into the state

Tax on marketplace sales: 7.1.2019

Washington, D.C.

1.1.2019  

More than $100,000
or
200 or more separate transactions
Taxable products* and taxable services, including digital property Tax on marketplace sales: 4.1.2019

* State sales tax laws generally use the term "tangible personal property" (TPP).  TPP is property that can be perceived by the senses, i.e., seen, weighed, measured, felt, or touched. For simplicity, we're using "products."

** No remote sales tax law at this time.


Use the South Dakota v. Wayfair filter to watch expert videos and get answers to the following questions and more:

  • Could other states follow South Dakota's lead?
  • What can out-of-state sellers do now to prepare?
  • Why should companies automate sales tax?

More questions? Ask the experts.

From our blog

Read more about the Supreme Court ruling.

Frequently asked questions

Read our most frequently asked questions and answers here.

Q&A forum

Watch our video Q&A forum with tax experts Scott Peterson and Rachel A. LeMieux, CPA, CMI.

Comprehensive guide

Discover everything you wanted to know about South Dakota V. Wayfair, Inc. and its impact on remote sellers with our comprehensive guide.


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