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US 2020 sales tax changes foreign sellers & marketplaces

  • Jan 1, 2020 | Richard Asquith

Following the 2018 South Dakota vs Wayfair ruling at the US Supreme Court, most of the 45 US states which impose sales tax have updated their rules to bring in out-of-state (non-resident or foreign) sellers into the tax net.  This can be by:

  • imposing an obligation on the foreign seller to sales tax register once over a set threshold; and/or 
  • by imposing an obligation on facilitating marketplaces to collect on behalf of foreign sellers any sales tax due

Major state-level changes to this from 1 January 2020 include:

  • Hawaii and Pennsylvania will impose the Wayfair-rule on out-of-state sellers and sales tax collections.
  • Arizona and Georgia, which already have out-of-state taxing rules, will lower their sales tax registration thresholds to $150,000 and $100,000 respectively.
  • Hawaii, Illinois, Michigan, and Wisconsin will start requiring marketplaces to collect sales taxes on sales made by third-party sellers on their platforms.

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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