Will states without economic nexus laws adopt South Dakota’s model?
The impending decision by the Supreme Court on economic nexus could impact many remote sellers. Vice President of Tax Policy and Government Relations Scott Peterson, explains whether other U.S. states will adopt South Dakota's economic nexus law if they're successful with their case in front of the Supreme Court.
"If South Dakota wins their case, it makes perfect sense from a state perspective for the other states in the country that have not adopted a similar law, to adopt a similar law. There haven’t been a lot that have done so this year. I think they’re waiting to see what the court says, if there are conditions that the court puts on South Dakota before South Dakota can have this new power. The way that South Dakota crafted their law, stated that you have substantial economic nexus in South Dakota if you have more than $100,000 in sales in South Dakota. They also say in their case that that equals a 30-million-dollar company around the country. Well, how does this concept of $100,000 in sales in South Dakota roll out around the country? Is $100,000 the right number in every state? Or does this have to be relative, and a state like California would need a larger number than South Dakota, and Florida have a slightly smaller number than California? It will most certainly be something that slows down the decision-making by these states. But everybody should assume that if South Dakota wins, every state in the country will adopt one of these economic nexus laws."