US 1 Oct Super Sales Tax Tuesday
- US Sales Tax
- Aug 27, 2019 | Richard Asquith
On Tuesday 1 October 2019, the imposition of US sales tax obligations on foreign (‘remote’) sellers and marketplaces goes full throttle. This will include new tax laws for Texas, the country’s second most populous state.
More than twelve new states will extend or update the requirements on remote sellers and marketplaces to tax local consumers with sales tax. This follows the 2018 South Dakota vs Wayfair Supreme Court ruling that created a new 'economic nexus' test. This set the trigger for collecting sales tax as merely selling to consumers remotely. Previously, states would require some actual presence in the state - known as 'physical nexus' - before taxing obligations where established. Physical nexus was interpreted differently across the 45 states that levied a sales tax – from local staff, premises, stocks to merely a visiting sales team. The Wayfair economic nexus test extended this to just selling across state lines by out-of-state sellers over a local state registration threshold.
The following seven states will implement economic nexus on 1 October 2019: Arizona, Kansas; Maryland (extending the existing law); Massachusetts; Minnesota; Tennessee; and Texas.
In addition, the following states will impose marketplace facilitator collection requirements: Arizona; California; Colorado; Maine; Maryland; Massachusetts; Minnesota (extending existing law); Nevada; North Dakota; Texas; Utah; and Wisconsin. The marketplace facilitator laws requires in and out-of-state marketplaces hosting online sales by remote sellers to collect sales tax on their behalf. Again, there is a registration threshold, but these can differ significantly from state-to-state.
Webinar: Super Sales Tax Tuesday
24th September 3:30pm BST
More than twelve new U.S. states will extend or update the requirements on remote sellers and marketplaces to tax local consumers with sales tax.
Latest American news
February 18, 2019
Wyoming is to require marketplaces to collect out-of-state Sellers’ sales tax from 1 July 2019. This is based on the 2019 South Dakota v Wayfair Supreme Court ruling, imposing ‘economic nexus’ sales tax liabilities on sellers not located in a state for the first time.
January 16, 2019
The New York state tax department published on 15 January 2019 guidance on the immediate requirements for out-of-state sellers to register and charge Sales Tax.
January 3, 2019
Texas has become the latest US state to implement Sales Tax obligations on out-of-state (non-resident) merchants. This follows the 2018 South Dakota vs Wayfair Supreme Court ruling obliging remote sellers without a presence in a state to charge and remit local Sales Tax.